Bitcoin and Pound Cost Averaging: What is it?
Crypto investors that make recurring purchases (dollar-cost-averaging / pound-cost-averaging) are more likely to remain in profit over longer periods of time. Data shows, that even with the $20,000 peak in 2017 / 2018, investors that consistently invested the same fiat amount per month over longer periods of time are in profit. Researchers at Coin Metrics have shown that investors who continuously bought BTC over the past three years would have a 61.8% return on their invested funds.
Buying Bitcoin, Made Easy
Simply put, pound cost averaging for Bitcoin sets up a recurring transfer and trade to buy the same amount of Bitcoin each month in Fiat value ($100 for example) regardless of what the price is on any given day or month.
The strategy is designed to maximize your cryptocurrency portfolio gains over longer periods of time instead of trying to time the market by trading the highs and the low. Employing this strategy is often referred to as the "set and forget" strategy as you are focused on the long-term gains, not the short-term sharp market movements.
If your bitcoin investment goal is to maximize profits you would need to be an active trader and anticipate every high and low in the market in order to profit. Historically, 90% of traders trying to "time the market" lose money in the process. Take a look at the Bitcoin Price chart from 2017 until today, could you have predicted bitcoin's price movements?
One Wall Street strategist said: "Time in the market" will always beat out "Timing the Market". By missing out on key market price movements and bull runs by trying to stay glued to charts and screens you can miss the bigger picture. By ensuring you have a long-term approach to growing your portfolio you can ride out any downtrends by buying at a discount and accelerate these profits when the market is in an uptrend. Using a pound-cost-averaging strategy the same way you would with stocks, shares, commodities and even your pension can be beneficial over the long term. Check out this article about the difference between being an Investor and a Trader.
This is the very reason we created coinpass Auto-Trade. Growing your wealth through crypto shouldn't be treated differently compared to other parts of your portfolio. By setting up a recurring standing order at your bank, and enabling auto-trade on your coinpass.com you'll be reducing your averaging entry price over time.
You'll also benefit from having your bitcoin and other cryptocurrencies covered by top-level insurance cover and all keys kept safe and secure in offline cold storage meaning no chance of losing your private keys!