The innate volatility of crypto makes crypto-investing a daunting venture to embark on for the crypto-newbies. For this segment of growing investors — with their portfolio full of traditional stocks, real estate and bonds — the biggest question lies in figuring out the best time to enter the market and how to start allocating their wealth into this promising segment.
To address this knowledge gap, Matrixport is introducing “Auto-Invest” product that leverages on a dollar-cost averaging (DCA) approach for asset allocation, bringing traditional investment strategy to the crypto world and creating a safer gateway for crypto-newbies to kickstart their investing journey.
A Safer Entrypoint for Crypto-Investing
DCA is an investment strategy in which an investor divides up the total amount to be invested across periodic increments instead of all at once. The goal is to reduce the impact of volatility on the overall purchase without risking too much capital at any given time.
The operation behind DCA investing is straightforward.
Investors can choose an amount that they are comfortable investing in regularly — regardless of the current price of the target asset — and see the cost of purchases “average” out over time to counter any potential impact of a sudden drop in prices. Users can also capitalise on bear markets and enjoy earning potential returns from market upswings.
Who Should Invest Via Auto-Invest?
Serving as a potentially safer choice for crypto-newbies or stablecoin holders, Auto-Invest’s DCA approach can be an effective way to own crypto without the pressure and heavy lifting of timing the market.
< BTC Close Price | 24-Week Investment Horizon | 22 Mar – 30 Aug 2021 >
For illustration, an ‘Auto-Invest’ enabled a DCA strategy would have generated 30% returns based on a weekly $50 accrual of BTC over 24 weeks from 22 March to 30 August 2021. This compares to a 8% return for the same investment of US$ 1,200 if BTC traded on 22 March 2021.
Within this 24 week timeframe, the price of BTC ranged between US$ 60,204 (5 April 2021) and US$ 35,862 (31 May 202), and Auto-Invest’s powered DCA strategy ensured BTC accrual at the lower price points during this period.
The product works as a way to reduce the chances of taking serious hits to the portfolio caused by short-term price volatility, while tapping into the yield-generation opportunities in the digital asset space.
How Do I Start Investing with Auto-Invest?
Investing in Matrixport’s Auto-Invest is an effortless process. Accessible on the Matrixport platform, simply purchase USDC via wire transfer and set-up Auto-Invest to start investing in crypto.
On a single-app, investors can decide on the type of coin (BTC/ETH), select time intervals (every hour, day, week or month) and set dollar limits. The tool also allows one to decide the maximum limit price to buy the asset at with no requirement for USD lock-up.
< Matrixport Auto-DCA Plan Review >
With zero service fees and the flexibility to change your rules anytime, Matrixport’s Auto-Invest offers a sophisticated and sound investment strategy in a simplistic way to make crypto-investing easy for everyone.
The product, of course, does not eliminate risks, but it does offer users a smooth transition into the market and a relatively conservative approach to crypto-investing, without having to worry about finding the “right” timing.
For all crypto-newbies out there, the best time to enter should no longer be a question. If you want to get long-term value from your crypto assets, the best time to enter is NOW with Auto-Invest as we face a long-term bearish market.
What are you waiting for?