A guide to buying Bitcoin monthly with a fixed amount, regardless of price. Allocate no more than 5% of your monthly savings, store it in a hardware wallet, not on an exchange. Bitcoin is risky and speculative.
Every month
$100
3% of what you can save every month
No more than 5% of the money you decide to invest every month
So the price of bitcoin has been rising in the recent months. And then you have seen we touch more than $60,000, right? That is crazy if you think about that. And now the price is going down. And the usual question is, okay, now what shall we do? Shall we buy more? Shall we sell? And it's often the case when there is a change of price, right? For bitcoin is not easy because it's not an asset that you are sure in the future it will be always going up. Of course there are different opinions, but. But if you ask me, bitcoin is something risky, okay? So I will put just a small amount of my money in debt and I will put more money, something where I have more confidence the price will go up eventually, like the etf, tracking the US market, the spy, for example, or things like that. However, what could be a good strategy to invest your small amount of money in bitcoin? That can be, for example, 3% of what you can save every month. Now there is a technique called DCA dollar cost averaging. So what is the idea? The idea is that every month you put the same amount of money and you buy bitcoin, right? Regardless of the price. So how does it work? Let's say you start to buy in January 2021. So you buy this day, okay, Just indicate this generic. But it can be whatever it is. You can, can be the beginning of the month, the end of the month. Then in February you do the same. You buy here. And then in March the price is here. And then in April the price is, I don't know, around here. And then in May we are around here. So every time you see these, you buy, okay, the same amount. Let's say that you can save, I don't know, hundred dollars. So you buy hundred dollars here, you buy 100 here, 100 again, 100 and then you buy again here. So what is the thing here? When the price is higher, you buy less. And when the price is lower, you buy more. So eventually you are buying an average price, okay? You are not paying too much, you are not paying too small. And the point is that this technique is quite interesting. When you are in this situation of not knowing if it's time to buy, time to sell, you don't know, you just want to accumulate with this one and you don't want to pay too much. So if, let's say you are around here and then you have to spend 28,000 for one bitcoin, how many bitcoins are you buying? Well, in this case, you will buy your hundred dollars over 28,000. Let's say that this is the price of dollar for each Bitcoin. And this number, this fraction, is how much you buy. Now if, let's say you are here or here. So how much do you buy here again, 100 over 45. Right now you see that you are dividing by a larger number, meaning to say you are buying less. Why? Because the price is higher. So you see, when the price is lower, you buy more. When the price is higher, you buy less. And this is a very simple technique that you can use when you are investing or I would not even say is investing because cryptocurrency, to me at least they are quite speculative in nature. We don't know what will happen in the future. You see that just one tweet can have a huge impact. So to recap, how does it work? First you decide how much to save every month, let's say hundred dollars. And then every month, maybe the beginning or the end, you decide that, okay, I'm going to buy hundred dollars worth of bitcoin, right? And you keep repeating this and this and this every month. And the other important thing is don't leave the bitcoin in an exchange, but put them in a wallet. Better if it's an hardware wallet, right? This way is safer. So this is the simple way I would suggest to people that are not really into trading and they don't want to spend a lot of time looking at the trend and the price and keep having doubts about what to do. This is a very simple way and it can be quite effective. Again, the important thing is don't put too much because this to me is really a speculation. So this hundred dollars must be, I would say, no more than 5% of the money that you decide to invest every month. And with that I can conclude the video. So if you have any question, please let me know. Otherwise you can put a like if you like it, subscribe and see you next time.
