Investment applications have exploded into the mainstream, opening up many doors for those seeking a variety of investment opportunities. Auto-Investing apps are ahead of the pack in that they offer simplicity and ease of use for digital asset investors of all sizes, especially those looking to capitalize on one of the most popular investment strategies ever created: dollar-cost averaging.
Fortunately, for investors looking for digital asset exposure, there are also bitcoin auto-investing apps that allow you to dollar-cost average into bitcoin.
What Is Dollar-Cost Averaging?
Dollar-cost averaging is a simple investing strategy that involves making regular, fixed dollar amount investments into an asset or fund to accumulate wealth over time.
Warren Buffet, Dave Ramsey, and hundreds of other investors have championed this method. The concept revolves around patience and a steady flow of cash to investments, such as ETFs or mutual funds.
“If you like spending six to eight hours per week working on investments, do it. If you don’t, then dollar-cost average into index funds.” – Warren Buffet
Should an investor consistently deposit funds once a week into an S&P 500 ETF with approximately 7-9% returns a year, the individual will not fall victim to market volatility because the buy price averages out through those up and down periods.
Auto-investing at regular intervals means you will not have to spend time watching the markets in an effort to determine the best time to buy and sell.
How Does it Work?
Auto-investing in bitcoin follows the exact same process as dollar-cost averaging in an ETF or mutual fund.
For example, let’s say you want to invest $100 into bitcoin every week. Should the price of the digital currency fall, your $100 will simply buy you more bitcoin. If the price rises, your weekly investment will buy you less bitcoin. By taking this approach, you can “average out” the cost you pay for bitcoin over time.
Since bitcoin’s price fluctuations can be severe, you might find yourself buying into the digital currency at a high point, only to see its value decline sharply. Alternatively, you might sell your bitcoin, thinking the market has hit a top, only to find bitcoin enjoys notable gains in a short time frame.
A Bitcoin DCA app connects to the user’s bank account and periodically withdraws a fixed amount, placing the cash into bitcoin to enable the user to “stack sats” (i.e. invest in bitcoin) on auto-pilot.
Auto-investing gives people the ability to passively invest without lifting a finger, and anyone can set this up in a matter of minutes. The (potential) payoff will be earned over a longer period.
Top Bitcoin DCA Apps
Several bitcoin investment apps offer users the option to set up recurring investments in digital assets. Bitcoin Market Journal has compiled a list of the best apps for passive crypto investing.
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Should You Use a Bitcoin Auto-Investing App?
The barriers to entry for digital asset investing have slowly disappeared over the past decade. What was once considered a taboo virtual currency investment has now transformed the way in which we think about money.
Auto-investing apps might offer the most convenient path to wetting one’s feet in the digital asset investment space. The minimums tend to be either extremely low or nothing at all, and opening an account can take as little as ten minutes.
If you’re new to investing, auto-investing apps provide the perfect balance between education and experience, allowing users to learn about their investments while depositing a few dollars to watch it work in real-time.
Conclusion
If you believe in the future of Bitcoin and want to start building a sizable position, then bitcoin auto-investing apps offer the ideal avenue to do so. These apps enable you to auto-DCA bitcoin in an easy and hassle-free manner that enables even those with little to no investment knowledge to become Bitcoin investors.
Further Reading:
- Best Cryptocurrency Trading Courses, Rated and Reviewed for 2021
- How to Buy Dogecoin: A Step-by-Step Guide (with Screenshots)
- Ethereum Futures: What Are They and Where Can You Trade Them?
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