Systematic investing in Bitcoin

“Our favorite holding period is forever.” - Warren Buffett Bitcoin – the world’s first cryptocurrency has been in existence for more than a decade. The cryptocurrency, which started with a single white paper, has grown to more than $1billion in market cap. This has drawn worldwide attention to the digital currency – leading to many investments in Bitcoin.

Although putting a vast sum of money in cryptocurrency is very risky. This risk is coupled with the volatile nature of Bitcoin and cryptocurrency. But with Systematic investment in Bitcoin, you will eliminate the risk of temperamental decision making. It will also save you the stress of timing the market since your investment is projected for the long run. 

Let’s look at how to explore this investment strategy in order to minimize the risk and make a profit. 

What is Systematic Investing?

In simple terms, Systematic investing is an investment strategy where the decision is defined by the led down rules. A systematic investment plan in Bitcoin will neutralize the risk involved due to the market fluctuations. And it will help you to grow your total holding. Another reason why systematic investment is crucial is that investors don’t need to spend much time watching the market activity. 

The popularity of Bitcoin is rising every day, with numerous developments springing up in the cryptocurrency world. Developers are looking for ways of moving cryptocurrency into the mainstream of the finance system. And Bitcoin, the first cryptocurrency, still dominates the crypto market both in trading volume and market capitalization. For now, it is assumed that Bitcoin still delivers the biggest return on investment since it came into existence. It is one of the crucial reasons why you should utilize this opportunity to invest in Bitcoin. 

Even though investing in Bitcoin comes with huge risk, systematic investing in Bitcoin is an excellent way to minimize the risk involved. With the Systematic investment plan, investors and users can save regularly with smaller amounts of money while gaining from the long-term advantages of dollar-cost averaging (DCA). 

Difference between Systematic Investing and Dollar Cost Averaging (DCA)

Systematic investing involves investing a certain sum of money regularly and usually into the same network. In contrast, dollar-cost averaging involves different strategies used by investors to reduce the downside risk of depositing a large sum of money into a network or market. In DCA, the deposited funds are detected by the system and distributed into various portfolios. The fund is shared in a way in which they work. That is to reach the target allocations of each asset in the portfolio. 

However, in the systematic investment plan (SIP), the investor makes a consistent and equal payment into a mutual fund or trading account. With the SIP, the investor will be able to save funds regularly while feeling less concerned about the market volatility. Simply put that SIP works under the principle of DCA. 

With the SIP, investors or individuals will have lesser chances of seeing their investment moving in the negative direction. It will also give the individual the time to focus on other business while benefiting from the long-term systematic investment plan. 

Systematic investing allows investors to use a smaller amount of money with the benefits of dollar-cost averaging. Both the SIP and DCA work hand in hand to give you the best strategy that you need to benefit from your investment. With both of them, you have a full assurance that your investment is safe, with no hindrances.

Why you Should Start Systematic Bitcoin Investment Plan

Companies offer individuals and investors the opportunity of investing, including systematic investment plans. Systematic investing gives investors the chance to invest a smaller amount of funds over a long time. The SIP strives to save the investors from investing large sums at once, thereby reducing the financial risks involved. 

Even though most systematic investing requires depositing funds consistently, such as weekly, monthly, or quarterly, it is also a fantastic way of earning income through Bitcoin. 

For example; If you have been investing $10 Bitcoin monthly since January 2011, your total investment revenue would have amounted to nearly $700,000 today. Originally, your total investment would be (12 x10 x 9) = $1080. However, with the rising in the value of Bitcoin, it would have increased your total investment. That’s huge. Only a few investments or even none can produce over 64000% return within a decade. It is what makes systematic investing in Bitcoin an unbeatable investment in terms of return on investment (ROI). 

In a shorter time of, let’s say, three years, you would have invested $360 (that is $10 every month) and would have gotten more than $800 in return. That’s like more than 95% return. Is there any business that can offer such ROI within this short period today? 

Our Tips on Exploring the Lucrative Systematic Bitcoin Investment Plan

Although systematic investing in Bitcoin is a lucrative business, there are still some precautions that you need to note before diving into this business. Cryptocurrency, in general, is volatile, including Bitcoin. This volatility and the security of the network are the major challenges posed in this business.

Therefore, it is crucial that you must start with a small amount of investment. It will prevent you from not encountering many losses in the future. That is, if there are issues within the network or volatility issues. 

If you want to start a SIP investment, my advice is that you start with a little fixed amount in the first week of every month. Practically making your crypto SIP. 

Suppose you invested when the Bitcoin price is $25,000. You will see that you will keep having a profit as the price of BTC continues to rise. Your loss will only come when the price of BTC falls below $25000. However, your investment might still accumulate interest if you are using most of the crypto investment platforms. 

Where to start Systematic Investing in Bitcoin

There are a lot of exchanges or platforms where you can start your systematic investment plan (SIP), such as; 

Coinbase Exchange: Coinbase made it easier for new and experienced investors to make passive gains through DCA (Dollar Cost Averaging) while hedging market risk. While it is almost impossible to time the volatile crypto market, with DCA, you can turn the market volatility into an opportunity to make a profit. When you use the Coinbase DCA, you will be investing a certain amount every day. You will only buy more crypto when the dollar value is lower, and you buy less when the dollar value is high, thereby helping you to have a massive return on investment. 

Binance Exchange: The Binance DCA provides new and experienced investors an easy avenue of mitigating some of the risks involved in Bitcoin trading while making a profit from your investment. 

Dollar Cost Averaging

The core benefit of DCA is that it reduces the risk of making a bet at the wrong time. For example, let’s assume you have $1000 that you want to invest in Bitcoin. You will see that if you divide your investment into smaller chunks, you will likely have a better result than when you invest the same amount in one large chunk. 

Systematic investing will allow you to invest a smaller portion of your income in Bitcoin over a certain period. DCA  and SIP’s goal is only to smooth the market entry to reduce the risk of bad timing. Binance is an excellent platform where you can initiate your systematic Bitcoin investment plan. It will help you to save for the future. 

There are other platforms where you can start your SIP project, such as; BitDroplet, Unocoin, etc. Besides exchanges, one can also leverage a systematic investigation strategy by opting for trading software such as HyperTrader.

As an individual, you can invest a smaller part of your income in SIP. The SIP and DCA allow for a small investment. It means that you can start with little investment in Bitcoin. That little investment might return 500% profit within the next 12 months. It will help you to boost your finance. Also, with the SIP investment, you bypass the problems associated with Bitcoin trading. 

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Written by:  Narender Charan

 

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