Arguably, the easiest way to invest in bitcoin is by making regular, recurring bitcoin purchases regardless of where the price is trading. This strategy is known as bitcoin dollar-cost averaging and can be seamlessly executed using any of the following bitcoin auto-investing apps.
What Is Dollar-Cost Averaging?
Dollar-cost averaging (DCA) is an investment strategy where you make small and fixed weekly or monthly investments into an asset. Rather than making a single lump sum investment, DCA offers a low-risk option for investors.
By using this strategy to invest in bitcoin, you benefit in the following ways:
- You will avoid price volatility. Since bitcoin is relatively volatile, you will find it difficult to time the perfect moment to buy a price dip. But when you apply dollar-cost averaging, you will regularly make your fixed investment irrespective of the price.
- It is ideal for both small and large investors. Whether you can only access $50 a week or $500, DCA does not discriminate and works well for all types of long-term investors.
- The returns will compound. As long as the value of bitcoin is growing over time, you will earn returns on the first investment you made and on each subsequent investment. Furthermore, you will gain returns on the returns your investment has generated.
How Dollar-Cost Averaging Bitcoin Works
Here is an example of how bitcoin dollar-cost averaging works:
Let us say you have $500 that you want to invest in bitcoin. Instead of investing the full amount at a go, you can divide it into small investments of $20. That means that you will be investing $20 in bitcoin daily, weekly, or monthly, depending on your preference. As a result, your investments will average out through the constant bitcoin fluctuations.
Many investment experts believe that dollar-cost averaging is an excellent investment approach. Case in point, famous investor, Benjamin Graham, said:
“[Dollar-cost averaging] has worked extremely well for those who have had the money, the time and, the character necessary to pursue a consistent policy over the years regardless of whether the market has been going up or down. If you can do that, you are guaranteed satisfactory results in your investments.”
Dollar-Cost Averaging Bitcoin Historical Returns
Not sold on dollar-cost averaging bitcoin yet?
Well, here is a better example based on bitcoin’s price history. If you had invested $20 in bitcoin weekly for the last five years, the total value of your bitcoin investment would now be $97,313, according to DCAbtc.com’s calculator.
Alternatively, if you had bought $50 worth of bitcoin every week for the past five years, your total bitcoin investment would have grown to a staggering $243,284.
From these examples, you can see that making recurring bitcoin investments can pay off big time if you stick to dollar-cost averaging and stay disciplined.
Best Bitcoin Auto-Investing Apps
Now that you know what dollar-cost averaging bitcoin is, below is a list of seven auto-investing apps that you can use to apply this strategy.
Relai is a bitcoin auto-investing app accessible to people in Europe and Switzerland. You do not need to register an account to use this app. You can start using it immediately after downloading it.
To use this Relai, simply open the app and enter the amount you want to buy in EUR or CHF. Next, make the payment via your bank account, and you will receive your BTC. Moreover, you can set up a weekly recurring order to enjoy the merits of dollar-cost averaging bitcoin.
- You can start with an investment of as little as 10 euros.
- Users make payments directly from their bank accounts.
- The platform charges an all-inclusive fee of three percent on each buy and sell transaction.
- Users receive a non-custodial wallet. That means that Relai does not hold your private keys. Only you control your funds.
Bitaroo is an Australian-based bitcoin exchange that offers DCA. To access this feature, you will need to sign up for an account. Next, click “Trade” and choose “Recurring Buy (DCA)” from the drop-down menu. Enter the amount and select your preferred frequency.
Your order will market buy immediately, and the exchange will continue fulfilling your order, depending on the frequency you choose.
- Users can deposit funds in AUD in their accounts. The deposit fee is $1.95.
- Bitaroo charges a KYC fee of $4.95. If you pay this fee with BTC, you will receive a discount of 6.15 percent.
- The DCA fees range from about 0.1 to 0.19 percent.
Bull Bitcoin is a bitcoin service that allows Canadians to access recurring buys. To schedule a recurring DCA buy, you will have to create an account.
The Bull Bitcoin DCA feature offers users an option to create a custom schedule. Simply click the “Recurring Buy” option from the menu and choose or create a frequency. Enter the amount you want to spend on bitcoin and paste or scan your bitcoin address.
Note that the exchange will take payment from your account balance. However, if the funds in your account are insufficient, the exchange will cancel the recurring buy with no penalty.
- The exchange provides a non-custody wallet.
- Bull Bitcoin charges zero percent processing fees unless you are buying BTC worth more than CAD1,000,000 through your account balance.
- The platform offers several payment methods like wire transfer, direct debit, Flexepin, and E-Transfer.
Cash App is a US-based payment service that enables users to schedule automatic bitcoin purchases. To use this service, you will need to download the Android or iOS app and create an account.
To buy bitcoin using DCA, tap “Buy.” Next, select the frequency you prefer and enter an amount. The minimum investment for automatic purchases is $10.
- You have to purchase bitcoin with the balance in your account.
- The app will display the fees before you complete the transaction.
- Cash App supports Visa, American Express, Discover, and Mastercard debit and credit cards.
CoinCorner is another auto-investing app that offers DCA. It is a UK-based exchange that is also available to users in 44 other countries. Some of these nations include Kenya, South Africa, and Singapore.
CoinCorner has an auto-buy option allowing investors to dollar-cost average bitcoin. To access this service, register an account and set up a standing order. Next, select how often you want to buy bitcoin.
CoinCorner also offers an iOS and Android app.
- Users can access the live chat from Monday to Friday between 9 am and 5:30 pm.
- You can only use auto-buy via a GBP bank deposit.
- The minimum fee for auto-buying bitcoin is £2, while the maximum is one percent plus £1.
- CoinCorner supports numerous payment methods such as debit and credit cards, Neteller, SEPA, and bank transfer.
Independent Reserve is an Australian crypto exchange that supports bitcoin auto-investing. You have to create an account before using this feature. Once you are done, you can use DCA by auto-buying on deposit. Alternatively, you can create a schedule to buy bitcoin regularly.
You can access DCA through the “AutoTrader” tab on your account page. Select “Buy” then choose BTC. Pick a schedule, then enter the amount.
Note that this platform gives users several frequency options like daily, weekly, fortnight, monthly, and the last day of the month. Also, you can dollar-cost average other coins besides bitcoin.
- Independent Reserve accepts AUD, NZD, and USD deposits.
- You can also sell bitcoin on a schedule.
- DCA only attracts a standard brokerage fee.
- The platform accepts Osko deposits, electronic fund transfers, and SWIFT deposits for international users.
Swan Bitcoin is an auto-investing platform for US residents. You need to download and install the app, register an account, and link to a US bank account. Go to buy bitcoin, enter an amount, and select the frequency. Swan Bitcoin will send the bitcoin to your wallet address or store it with a regulated custodian.
The minimum amount you can save on this platform per month is $10.
- You can prepay annually for recurring buys or pay as you go. The minimum fees are 1.99 and 2.29 percent, respectively.
- Swan Bitcoin does not charge a spread or markup for BTC buys.
- You can fund your account from an international bank account.
Depending on where you reside, you can choose any of these auto-investing apps to dollar-cost average bitcoin. Once you create a schedule, you can relax as you wait for your stack to grow.
To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.