Some of my friends have started cryptocurrency investing in 2021 because of the price increase. Most of them want to make some money quickly and put some aside for retirement. Of course, this is a short time strategy. When the prices drop, such people tend to stop investing. That is why I always suggest that they should invest monthly in bitcoin instead. With this strategy, you don’t need to worry about price changes, and your wealth is more likely to grow in the long run.
Why should I invest in bitcoin monthly?
Some of my friends bought crypto money with their credit cards. They invest only for 4 or 5 months and try to make a profit. Some of them succeeded — but some did not.
When I talk to my friends about Bitcoin (BTC), or other cryptocurrencies, I always say, “Monthly investing for a long time is better than a short time investment.” I want to give the same example here and explain how investing 100 dollars a month over the next 30 years could bring you more money.
You may think it is absurd, but let’s calculate together. One year has twelve months, and 30 years have 360 months. If you are investing 100 dollars a month, you will have 36,000 dollars in 30 years. The banks or institutions generally give 0.8 percent in a 3-year-term interest rate. You would get approximately 40,700 dollars if you are lucky.
On the other hand, if every month you buy some BTC with 100 dollars, the value of your money will grow as the bitcoin value grows. Besides, you don’t need to worry about the crypto price changes. With this strategy, you buy both highs and lows. So in the long run, your investment is likely to be worth more than if you bought bitcoin once.
But you can’t earn interest on bitcoin, you might think. Actually, you can. Bitcoin interest accounts are growing in popularity, as they allow people to earn interest in BTC.
I know this is a simple explanation, and the actual math is more complex than my example, but you got the main idea. You can make the same calculation for 40 -, 50- or 20-year plans. Also, you may invest 200 dollars a month for 30 years, or any other sum you can afford. It is all up to you.
What is a monthly investment (recurring investment)?
If you buy company stock or a cryptocurrency once and wait for it to grow in price to sell, the results depend on the market. If the crypto market crashes or the company you chose goes bankrupt, you may lose all your investments.
Generally, banks, institutions, or brokers offer recurring investments. Recurring investment means you set a certain amount of money to pay every week or every month for specific assets. For instance, you can give 100 euros every month set 50 euros to buy Amazon shares, 25 euros to buy Tesla shares, and 25 euros to buy Apple shares. You can do the same with cryptocurrencies — set 100 dollars a month to buy 50% bitcoin, 25% Ethereum, and 25% Stellar.
If you decided to start a recurring investment in cryptocurrencies, you could gain more money than you would with a short-term investment. You would buy crypto at different prices and thus have a higher chance to get a better value for your money.
You can make your calculation and see if you invest in bitcoin monthly, or any cryptocurrencies can bring you more money than any other money market investment.
When it comes to deciding how much you would like to invest, there are two strategies that investors commonly use. They are dollar-cost averaging and value-cost averaging. Dollar-cost averaging means that investors purchase the same dollar amounts of cryptocurrency at regular intervals. For example, if you decided to purchase $50 in BTC every other week–no matter how much the price of BTC had fluctuated–this would be a dollar-cost averaging investment strategy.
Monthly savings in bitcoin and other cryptocurrencies
Now you know why the monthly investment strategy works. On Coinmotion, you can set up the Monthly Savings to do so. With this service, you pay only a 1 percent fee when you choose monthly savings into Bitcoin or other cryptocurrencies.
On Coinmotion, you can choose the sum for monthly investment and the distribution between cryptos. For example, you can distribute your monthly savings only to BTC or all nine available cryptocurrencies. For more information click here.
If you consider monthly investment in cryptocurrencies after reading my article, you should check Coinmotions’s monthly saving plan. Of course, for a start, you need to create an account. Click here to register your free account now.
The following piece does not include any investment advice. It is worth noting that investing in any digital asset includes risks, which should be carefully assessed before making important decisions.
What do you think about investing in bitcoin monthly? Would you consider this kind of investment, or would you still prefer buying for the short term? You can share your ideas and comments here.