If you're new to the cryptocurrency game, then you may be wondering how some experts buy their crypto. Especially, how they buy Bitcoin. Everyone has their own approach to purchasing Bitcoin, but here we will outline the most efficient strategy for buying it.
First off, we need to dispel some false teachings you might have heard.
1. Buying in bulk
Some people have said buying Bitcoin in bulk ($1,000 at a time) is the way to go and the only way to net any kind of long-term profit. While this looks good on paper, in reality, this is a dangerous strategy as spending that much on a single purchase could lead you to losing money.
Many people decided to buy in bulk at Bitcoins peak in 2017, and within a few months the price of Bitcoin dropped dramatically. Anyone who bought in bulk lost a lot of money.
2. Small one-time purchase
This is the opposite of what we just talked about. While you will not lose the same amount of money, it's also not the best way to go about buying Bitcoin. When someone buys a small amount, they think it will just stay in their crypto wallet and will increase in value. They don't take into account the buying cost. On Coinbase, if you buy $10 worth of Bitcoin, they will charge you $1 and if you pay via credit card that is an additional 4%. So, buying one-time with a small amount isn't the way to go.
The best strategy is what's called Constant buying.
Constant buying is just what you would imagine. You continuously buy small amounts and slowly build up your portfolio. Buying small amounts decreases the fees you pay and helps you avoid any damage from a sudden drop. Since you are constantly buying, you can track the market and use that to determine how much you want to invest at a time.
This strategy is also used by stock traders. This is ideal for Bitcoin as most people will only purchase a small amount of Bitcoin. These small amounts will increase over time and then you will be ready for the next big spike which appears to be coming within the next few years. This strategy is also perfect for those who don't have a lot of free money. This way, you only need to spend between $10 and $50 a month, and you will still be better off than someone who paid $1,000.
As with any strategy, this isn't foolproof. You will still be paying purchasing and credit card fees. However, this does have fewer risks than the other two strategies we talked about. So, it's the better option.
If you do end up using this method and buying some Bitcoin, you can track its progress using our in-built crypto tracker which will give you hourly updates on its price.