This may seem like canned advise, however it remains to be true; the way to get the best results from your investments is steadily and over the long-term. I am not saying no one ever got rich quickly. But more people get rich gradually, with a consistent investment plan. The same axiom is true when it comes to your cryptocurrency investments. It’s much more sustainable to invest smaller amounts consistently over time. Setting up recurring buys on Coinbase offers a way to do this.
One of the primary reasons for the success of long term, steady growth is that you will have a better dollar-cost average. This is a great way for an investor to take advantage of the inevitable fluctuations of the market. To use this investment strategy, it is easiest to set up recurring buys using a cryptocurrency exchange platform.
To be more specific, Dollar-Cost Averaging is an investment strategy where one purchases the same dollar amount of an asset in regular intervals. The purchase of the asset occurs regardless of the price. That means that sometimes your money will buy more shares or fewer shares, depending on the cost that day.
Planning out regular investment
Setting up regular investments is a good idea, because, for the most part, it’s easier to part with a small sum of money than it is a large amount of money. However, regardless of the amount, the regularity of the investment makes up for the fact that your investments might be comparatively modest. As I mentioned, purchasing an asset regularly, over time, allows you to take advantage of lower purchase rates. Markets fluctuate; that is a given. But by investing consistently, not only do your total holdings steadily grow, but you will be able to benefit from down markets when your money will buy more of the asset.
Moreover, setting up recurring payments is great for those who are interested in investing but do not necessarily have a lot to invest all at once. However, recurring buys are not only an option for smaller investments. Recurring buys are a smart way to invest, period.
Another reason that recurring buys might be appealing is if you’re not deeply invested in following the markets closely. You may understand the importance of investing, but do not really want to put in a great deal of time into watching the markets for lows and highs. If this is the case, then you might be better off with a recurring buy.
The beauty of automated investing
If your buys are recurring and automatic then you are set. You don’t have to worry about keeping too close a watch on the market.
So if recurring payments for your cryptocurrencies is something that seems appealing to you, it is pretty easy to get set up. To organize your recurring buys, you’ll need to open an account with a cryptocurrency exchange platform.
Coinbase and Gemini are two such examples. Not every exchange platform has a recurring buy option. So you will need to shop around for the best fit for you. Which platform you use will be based on considerations such as what cryptocurrencies you want to invest in. There may also be some limitations based on the currency you want to use to purchase your crypto-assets. Be sure you know what you want out of your exchange platform, and have confidence that the product can accommodate your needs.
To get started with a regular crypto investment, here are the four easy steps to
4 Steps to Setting a Recurring Buy
Step 1: Create an account with your platform of choice.
I have suggested Coinbase and Gemini, but there are many others with a recurring buys option. When setting up an exchange account, it is a lot like setting up a bank account. That is, the process is fairly straight forward. However, there are a few necessary steps for verification purposes. So again, I highly recommend that you do some more research so that you can figure out which service is best suited to your needs.
Step 2: Choose a form of payment method to link to your exchange account.
On most exchange platforms you will be able to choose your form of payment method. Typical linking options for initial payments include: linking a bank account, a credit or debit card, or recurring wire transfer.
Bank account: If you plan on making larger sum contributions to your crypto portfolio, then linking your bank account might be the best way to go. Using a bank account will allow you to buy larger sums of your cryptocurrencies. However, each platform is going to have limitations on the maximum amount per day or week that you can purchase cryptocurrency. And your bank may also have limits on daily withdraws. The one drawback of a linking a bank account is that it will typically take between 4-5 days for your payment to go through. Additionally, you may want to check with your bank to make sure recurring cryptocurrency purchases will not flag your account.
Credit or debit card: Using a credit or debit card will make instant transactions possible. This is probably the biggest benefit
Wire Transfers: Wire transfers are the most inflexible and expensive way to contribute to your crypto-assets. With a wire transfer, you can only make deposits. But it is still an option if that is what works for you.
Step 3: Initiate a recurring cryptocurrency buy, including amount and frequency.
Once you have decided what kind of account you want to link to your exchange platform, you will need to set up the details of your contributions. So, select which currency or currencies, you want to buy, how much you would like to regularly invest, and how frequently you would like to have the purchase occur.
For example, you could buy $100 USD worth of Bitcoin every two weeks. But you could also make contributions every week, or once a month; it all depends on how you want to invest, and what is the easiest way for you to manage your investments. On Coinbase, you simply check the “repeat this buy” box and configure how often you want the buy to take place:
Step 4: Track and manage your recurring buys.
After you have decided on all of the details of your recurring crypto buys, all you need to do is keep an eye on your investment. It is easy to get swept up in the markets. But remember, just like traditional fiat markets, cryptocurrencies are volatile. So you might be tempted to sell when things look rough. Savvy investors know that strong assets will recover over time. They know that recurring buys over time can provide a little insulation when dealing with a volatile market.
With a recurring buy, you can worry less about the short term. Because you aren’t necessarily parting with large sums of money. But stay in it and you could see gradual gains. Then, when the market is low your cash will go a little further, helping you make the most of your crypto-assets in the long run.