Kevin Hall's blog : Why go for recurring crypto Investments you ask?
There are several reputed cryptocurrency exchanges that offer the facility of using recurring buys for your crypto investment. Using recurring buys, you get the opportunity of buying pre-set amounts of the digital asset you want to invest in over dedicated and consistent intervals of time.
Suppose you choose to go for a strategy where you must buy Bitcoin at least twice in a month to be in a favourable position. You could then ask your broker to automate a purchase worth say, $200 two times in a month. This concept is not unique to crypto investments. In fact, it is inspired by such similar features on e-commerce platforms where payments are automated and memberships or subscriptions renew automatically.
What exactly is Recurring Investment?
In simple words, recurring investments is the basic action of repeating your investment activity over a period of time. It is a typical way to invest a set amount of money on a regular basis through an automated process. It operates on the Dollar-Cost Averaging (DCA) strategy that helps in structuring investment portfolios gradually by investing small capitals consistently. It is a good strategy for traditional as well as crypto investments which helps you buy more assets with your capital at a lower average cost. What you acquire is then relatively more than what a lump sum investment would have added to your kitty.
If you’re just getting started into the world of crypto, having a recurring buying plan is particularly useful. It is a lot like making an investment in EMIs, except in this case you do not pay extra for the same asset. Rather you end up gaining more of the asset with the same set of amounts spread over a period of time. This also does away with the need to keep monitoring rates in the market as recurring buys help you navigate through the highs and lows.
Recurring but keeps you from deviating from your investment plans. It encourages you to put aside a certain sum to purchase your financial assets that are not limited to crypto but also extend to stocks. The best part is that you have the liberty to customize the tenure and the amount you wish to invest. Whether you want to put in your money every day, once in two weeks or on a monthly basis, you simply need to instruct your broker to schedule it accordingly. Your crypto exchange will buy the asset as per your direction without having to manually do this or go through the entire process again. This would go on until you discontinue the service.
Why Recurring Buys are good for you
It is only
natural that when you’re an amateur player in the crypto space, you would be
apprehensive about risking your capital in one go. Using recurring buys or the
DCA strategy can help you establish a strong portfolio over a course of time.
If it is still quite early in the game for you to be able to fully comprehend
market volatility and economic conditions, recurring buys can be very
beneficial. It is a very effective way to minimize your risks and invest your
capital wisely.
Setting up a
recurring buy for your crypto assets like BTC is no rocket science. You could
be a total newcomer in the crypto market and still be able to set up a plan to
automate your purchases. The basic steps across most brokers and online crypto
exchanges tend to be as follows:
- You sign up on an online crypto
platform to get your free account set.
- You go through the basic identity
verification steps and then go on to link your bank account.
- After this you pick the cryptocurrency
you want to invest in and set the amount as well as the frequency that
works best for you.
- Once you’ve followed through you only need to sit back and wait for the BTC to be credited to your digital wallet.
Recurring cryptocurrency buys are also a big hit with many seasoned traders who see it as a way to establish and attain long-term goals. It has several advantages, some of which are listed below:
- Keeps emotions at bay: Like in every investment, emotional decisions are hardly
successful. If you’re high on emotions, you may end up making hasty,
panic-stricken trading calls which would fail to take into account all the
possible factors that are important for your trades. Recurring buys
prevent impulsive decisions as well as unnecessary stress that may accompany
each purchase if you were to do it manually every single time. The market
highs and lows could take a toll on your decision-making which could keep
you from making significant potential gains.
- Steadily grow your cryptocurrency
investment: Financial markets overall can be
unpredictable. Add the fast growing price of real-estate to it and you
might wonder whether any investment at this point is wise or not.
Recurring cryptocurrency buys are unlike these traditional purchases.
You’re only setting aside a portion of your disposable income consistently
in the intervals that suit you. Bit by bit, your position size and the
overall value would grow and bring in good returns.
- Diversify your cryptocurrency investments: The age old advice of not putting all your eggs in a single basket comes true here. Recurring crypto buys give you the opportunity to invest in multiple cryptocurrencies like Bitcoin, Ethereum, Dogecoin, Shiba Inu etc instead of concentrating your capital into a single digital asset.
- Closing thoughts
Recurring buys are a way of gradually growing your wealth by making small investments frequently. It can be very effective for those crypto traders who have spent time understanding and studying the market but often lack the wealth needed to get to the desirable position. Recurring buys are safer alternatives to getting onto a bigger position over a period of time rather than taking a risky move such as leverage to enter a large position in one go. It also saves you the trouble of keeping track of market movements and also has little room for errors. However, as in any investment, it is wise to be mindful your financial goals and capacity to stomach risks before committing any capital.
- News
- Random
- Technology