Lumpsum investments in cryptocurrencies are risky. And timing the market is hard. This is exactly where a disciplined approach of investing helps. Just like SIP in mutual funds, analysts in the cryptocurrency domain have started to admire SIP in bitcoins. This is to eliminate the risk of temperamental decision-making. Bitbns, allows investors the facility of regular investment in Bitcoins through Systematic Purchase Plan (SPP). It works on the same lines as SIP in mutual funds. SPP in bitcoins by Bitbns is named as ‘Bitdroplet’.
“Bitdroplet is a systematic purchase plan for bitcoin DCA that allows you to invest fixed amounts at regular intervals. Bbitcoin DCA works just like an SIP in bitcoin. You purchase fixed amounts of bitcoin at regular intervals, so that you are buying at different price points to counter the impact of volatility,” says Gaurav Dahake, CEO, Bitbns.
Bitdroplet allows investors to start small by investing as little as ₹75 per day. It supports daily investments, weekly or monthly investments.
Return potential of SIP in Bitcoins
According to Bitdroplet.com, if you would have been investing $10 since January 2011 and invested once every month, your investment would value nearly $700,000 today. Essentially, your total investment would have been (12 x 10 x 9) = $1080.
“Can you think of any other investment product that gives you over 64000% returns in a decade? No one can. And this is what makes an SIP in bitcoin unbeatable in terms of returns,” says Gaurav Dahake.
In a shorter tenure of three years, via SIP in bitcoin, you would have invested $360 ($10 every month) and would have got more than $700. That’s nearly a staggering 94% return.
Here’ s look at how a monthly investment of ₹500 in bitcoins for the last five years would have grown vis-a-vis other asset classes. However, there is no guarantee of the past performance in future.
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Risk still exists
However, SIP in Bitcoins does not make the cryptocurrency lesser risky. Investors should take sound decision by discussing with their financial advisors before investing. They should understand how the segment works before just jumping into it by looking merely at the returns.