Regular Purchasing for Better Investing Through the New Automatic Deposit Function
Investing in cryptocurrencies such as Bitcoin or Ethereum or a portfolio of cryptocurrencies is already a popular choice for every progressive investor. However, with the market’s volatility, it can be difficult for some investors to decide when to buy and sell. Fumbi is introducing a new feature that solves this problem for you.
Cost averaging via Automatic Deposit is an investment strategy with which you regularly invest a fixed amount of money in a specific asset, in this case, cryptocurrency or a portfolio of cryptocurrencies. This way, you spread your investment over time and reduce the risk of buying at the wrong time. This method works by averaging out the price of the asset over time, thereby reducing the impact of market volatility.
Regularly investing through an automatic deposit can be a particularly useful strategy when it comes to investing in cryptocurrencies. The cryptocurrency market is known for its high volatility, and prices can fluctuate rapidly. Therefore, it is wise to reduce the risk and gradually invest a regular amount, thereby reducing the overall risk of your investment. You don’t have to stress about short-term price fluctuations in the market.
An example of regular investing:
Let’s say that as an investor, you have free funds in the amount of EUR 1000 to invest in BTC. The current market value of Bitcoin is 50,000 EUR/BTC, so you can get 0.02 BTC for an instant purchase. However, instead of investing it all at once, you can use an automatic deposit and invest €200 every month for the next 5 months. This will spread your investment over time and reduce the impact of price fluctuations.
If BTC prices at the beginning of each month were €50,000 (first purchase), €53,000 (second purchase), €46,000 (third purchase), €40,000 (fourth purchase) and €48,000 (fifth purchase), you would get a total of 0.021288 BTC through these regular purchases at an average purchase price of 47,400 EUR/BTC.
So if you bought BTC all at once at one point and decided to sell it in the future at a price of 55,000 EUR/BTC, the value of your investment at the end of the investment horizon would be 1100 EUR (0.02*55000), which means that you would, as an investor, make a net profit of €100, and the total appreciation of your investment would reach 10%.
However, if you were to sell your BTC at the same amount of EUR 55,000/BTC after regular investing, the value of your investment at the end of the investment horizon would be EUR 1170.84 (0.021288*55000). The net profit from the same investment spread over several entry points would be €170.84, and the total appreciation of your investment would reach 17.08%.
Moreover, regular investing can help you avoid the stress and psychological pitfalls of investing. It is common for investors to get emotional and make rash decisions during market fluctuations. By using a systematic investment plan, you can avoid these emotional reactions and stick to your investment strategy, regardless of what’s happening in the market.
If you are interested in trying out a regular investment in cryptocurrencies through an automatic deposit, you can set it up through Fumbi Credits. With an Automatic Deposit through Fumbi Credits, you can automatically invest a fixed amount of money in the desired Fumbi product at regular intervals.
Investing regularly through an automatic deposit is a smart and effective investment strategy that can help you reduce risk when investing in cryptocurrencies. By gradually investing in the market, you can avoid emotional pitfalls and take advantage of the long-term potential of the cryptocurrency market. You can already set this strategy in your Fumbi profile.
Invest with Fumbi today
Capitalise on the potential of cryptocurrencies simply, safely and efficiently. Start investing regularly with an Automatic deposit through Fumbi Credits with an amount starting at €20. The Fumbi Algorithm in the Fumbi Index Portfolio tracks price movements in the cryptocurrency market for you. And if you want to get a weekly reward from investing, choose Staking Portfolio with an expected annual reward of 5-7% and no entry or annual fees.INVEST WITH FUMBI