How to start investing in crypto

Setting up a regular investment is not only easy to do, but it is one of the smartest ways to enter any investment.

Every Monday morning, while drinking a cup of excellent cold-brew coffee, I am pleased to see an email titled “You stacked with Swan.”

That’s because I have set up a very inexpensive ($0.50 cost) weekly buy of Bitcoin, and it relentlessly stacks up. It is a “set it and forget it” investment, but that notice gives me a little jolt of happiness each time anyway.

Here’s why and how you could do the same.

Why regular investments instead of all at once?

Because I (and almost certainly you too) are really bad at “picking” the right time to buy. It probably is not right after a 10x price increase, but you don’t really know that do you? Lots of times, crypto investments go up after that, and you would never see that price again.

Note that I am not talking about trading. I am not a trader, I don’t have the time to dedicate to that obsession, so I do not try to time the market. I don’t know when the peaks or bottoms will happen, so instead I spread out my investment.

By doing that, you “average” the costs. Yes, you never catch the bottom, but you will catch close to it. Also, let’s be honest, you were never going to call the exact bottom anyway.

The term for this strategy is “dollar cost averaging.” Sometimes you hear people refer to it as a “DCA” or sometimes as an awkward verb, “DCAing”. Regardless, it is a large concept that in practice boils down to making systematic and regular investments into an asset. Setting up a weekly buy of BTC is a perfect example of a useful and almost certainly profitable DCA investment.¹

By continuing to average those costs during a bull-run, you continue building for several reasons:

• Psychology: much better to “set and forget” your investments than try to time. Much less stressful and in the end more profitable.
• Time: Usually, bull-runs such as the lovely one we’re in now, are much shorter than the bear markets. You will therefore be making many more purchases when price is down than up.
• Number Goes Up: Over time, Bitcoin in particular has continued to move aggressively up against every other currency. I see no reason that it would not continue doing this, which means that continuing to acquire it is always a good strategy.¹

How to set up a regular Bitcoin investment

It is quite easy to set up an account, just use my invitation link, and hook up a checking account to it.

After that, there are big bold options saying how much you want to buy, and how often. I chose to buy $50 every week and convert to Bitcoin. You could also wire money in, or pay a 1.5% fee to do a “buy now” for however much you want.

Here’s my $50/week plan:

I could instead have it pull $70 a week from my bank, and then buy $10 worth of Bitcoin per day, for example. Personally, I’m fine with it being just once a week for now. Perhaps I might do it differently if I increased my savings rate quite a bit.

After telling it what and when to buy, I told it to withdraw my Bitcoin to my hardware wallet once I had enough. It will take a while before we get to that level, but I can manually withdraw anytime. I’m just saving transaction fees by stacking for a few months before doing so.

Why SwanBitcoin?

I like Swan for a lot of reasons, but they boil down to:

• Backed by Prime Trust, who doesn’t need to steal your Bitcoin, I think they’d be plenty tempted by all the other billions they already holding for other clients.
• Really quite cheap, I typically pay 0.50 USD in transaction fees per week.
• Easy, dead simple interface, it’s very clear what you are doing.

Conclusion

If you are looking for an efficient, long-term solution to build your investment, dollar cost averaging is your friend. Continual small purchases are less risky than lump sum or FOMO² purchasing. Whether with Swan or many other providers, setting up a DCA plan is both easy and smart.

Legal Disclaimer

This article is for education only, not financial advice. Please always do your own research. Cryptocurrency is extremely volatile, so any investment could incur losses not anticipated. Please, with this and any other investment, do not invest more than you can afford to lose, and never go “all in” on anything.

Some links in my articles may be referral links, which makes a couple sats for me and costs you nothing. If you don’t like that, please copy the link and remove the obvious referral code before using it. I’ll never know and I won’t be mad. For this one though, if you do, it will actually cost you more, not less, since my code gives you a 20% discount in fees.

Photo by Jess Bailey.

1: I am not a financial advisor, nor a prophet. I do not know whether any specific investment will be profitable. Always do your own research prior to making any investment.

2: FOMO is “Fear of Missing Out”, and it is one of the two big reasons people lose money in Crypto. The other is leverage.