Over the last 12 years, Bitcoin has continued to grow in value and popularity; more retail investors are starting to get into the sector and invest in the asset class. The fluctuations and volatility of Bitcoin have left many investors hurt or scared of getting in thinking they are going to lose, in the short or long term.
For Those of you who don't want to deal with the nosebleed highs and the deep trenches of the lows but do want to have exposure to the asset, Bitcoin, there is another way. If you're not a trader and don't have the stomach for risk but want to own a piece of the action, then dollar-cost averaging is a great strategy to follow.
What is dollar-cost averaging?
Dollar-cost averaging is an investment strategy that aims to reduce the impact of volatility on large purchases of financial assets such as equities or cryptocurrency. Instead of buying a large position once, you keep buying each week, bi-weekly or monthly at different prices and build up a place at different prices.
Dollar-cost averaging allows you to risk a small amount of capital each month and if the price goes up you buy in a little bit less, if the price goes down, you get a little bit more for your allocation of capital. This way you're not stuck at having to sell at a single price point you bought in to make a profit over time.
Finding more accessible ways to dollar cost average in
As Bitcoin's network effect continues to grow, the market needs apps that allow for scale and ease of use. Bitcoin is still pretty clunky to get into, and the interfaces used to transact on the blockchain do require a bit of know-how, or you could see yourself lose your coins.
There are several apps available today that allow you to dip into the market at programmatic intervals, just like your old fashioned debit order. You set the amount you want to be charged; the app will then buy the Bitcoin at the spot price of the day and add it to your account. No mess, no worries and no need to place buy orders. All you do is connect your payment method and let it run in auto in the background.
How to create a Bitcoin debit order
If you want to invest in Bitcoin every month at a small fee that you're willing to risk then download one of the following smartphone apps. Connect one of the supported payment methods for your region, and you can set a price that you feel comfortable with each month.
The app will then charge your account or credit card each month or week, depending on your frequency setting and add Bitcoin to your wallet at the spot price of the day it was purchased. This makes it easy and straightforward to get into Bitcoin, no need to deal with exchanges and checking market order books; you just set it to buy and let it run, just like your other monthly debit orders.
Crypto.com
Crypto.com is one of the most popular apps in the crypto space; it has a mobile app for trading, investing and spending Bitcoin and other cryptocurrencies. The app also interest-bearing account for keep cryptocurrencies with them.
To set up a standing order with crypto.com, you'll need to download the app onto your smartphone firstly.
- Follow the registration process and the KYC process.
- Connect your credit card
- Then click the menu button in the middle.
- Select recurring buy
- Set the purchase frequency you like: Weekly, Bi-weekly or Monthly
- Set the cryptocurrency you want: BTC, ETH, CRO, LINK or BAND
- Your minimum purchase value is $50, and you can set up to 5 recurring purchases on the app.
The crypto.com app is a custodial service, and the company holds the cryptocurrency you have allocated in your account on your behalf. You do not own the crypto outright as someone who has the keys to the crypto and thus expose yourself to counterparty risk.
So if you want to keep your BTC in a wallet that you own the keys to like a hot wallet or a cold wallet, you'll need to transfer the Bitcoin from the crypto.com app each month manually.
Get Crypto.com
Luno
Luno is a cryptocurrency to fiat exchange with a mobile app and operates in several countries and accepts various local currencies. Once you've registered an account with them, you can make a bank deposit and stake your fiat wallet with cash.
Once you've registered and completed the KYC, you can go ahead and set an order to buy from your fiat wallet each month, week or bi-weekly. This can be a bit annoying since you have to top up your account manually so try adding funds for a few months and allow it run.
The Luno app is a custodial service, and the company holds the cryptocurrency you have allocated in your account on your behalf. You do not own the crypto outright as someone who has the keys to the crypto and thus expose yourself to counterparty risk.
So if you want to keep your BTC in a wallet that you own the keys to like a hot wallet or a cold wallet, you'll need to transfer the Bitcoin from the crypto.com app each month manually.
Get Luno
Amber App
The Amber app is currently only available to Australian users but is one of the easiest ways to buy Bitcoin with a direct debiting system. All you need to do is download the app, create a profile, verify your email and phone number, and you're able to use the app.
Once the registration is over, you can connect the app to your Australian bank account, set your recurring investment fee and timings and allow it to run its course. The best thing about the app is that you can set up a regular investment from as little as $5 a month.
The Amber app is a custodial service, and the company holds the cryptocurrency you have allocated in your account on your behalf. You do not own the crypto outright as someone who has the keys to the crypto and thus expose yourself to counterparty risk.
So if you want to keep your BTC in a wallet that you own the keys to like a hot wallet or a cold wallet, you'll need to transfer the Bitcoin from the crypto.com app each month manually.
Get the Amber App
SwanBTC
SwanBTC focuses on the US market at the moment and allows Americans to create a simple Bitcoin savings plan using their app. Users can buy automatically every week, month, or paycheck, starting with as little as $10, which makes it simple and easy for anyone to get into Bitcoin.
All you need to do is:
- Create an account and follow the registration process
- Link any US bank account.
- Buy Bitcoin weekly, monthly, or every paycheck.
- Then get Bitcoin automatically delivered to your wallet or stored for free with a secure licensed and regulated custodian.
What's excellent about SwanBTC is that you have the option to store it with them as a custodian or move your Bitcoin to a wallet where you have the owner keys.
So if you want to keep your BTC in a wallet that you own the keys to like a hot wallet or a cold wallet, you'll need to transfer the Bitcoin from the crypto.com app each month manually. You will need to pay on-chain transaction fees for moving it off SwanBTC so make sure your purchases are worth it before moving it to the storage of your choosing.
Get SwanBTC
Start stacking sats on autopilot
There you have it four apps that allow you to buy Bitcoin at various intervals will enable you to dollar-cost average in and not have to worry about buy and sell orders. If you're in the game of stacking a position in Bitcoin over time and are willing to risk a few dollars (or your local currency) each month, then why not set up a standing order and test it out for a few months.
Source: nichemarket.co.za
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