The volatility in the crypto market has given rise to several investment strategies that can help crypto investors and traders in making calm investment decisions while building a long-term crypto portfolio. One of the ways of doing this is by using the recurring buy strategy.
Most centralized crypto exchanges, CEX, and crypto apps such as Gemini, coin base, Binance, have made this easy-to-use feature available to their users all over the world.
What is a Recurring Buy?
This type of buy or investment happens when an investor automates the buying of crypto assets. It is also called the recurring investment because it allows you to set up how you want to buy a particular crypto asset, at what time, and at what amount.
Recurring buy is an automated process of investing that uses the Dollar-Cost averaging (DCA) model, by which an investor decides what crypto asset to buy, specifies the amount to buy, and the exact day and time for the purchase using Fiat directly from a bank card. Once the recurring buy is set, it continues to run until the process is halted by the investor.
This way of investment provides you with the opportunity of specifying the exact time and day. This can be weekly, bi-weekly, or monthly. It all depends on how investors want it.
How does Recurring Buy Work?
It’s an easy-to-use feature that works in a similar way among different platforms. Using the Binance app for example,
- On the Binance homepage, go to buy crypto with a credit/debit card.
- Select or search the crypto asset you buy.
- Click on Enable Recurring buy.
- Set an interval and specific time and day for the purchase.
- Enter the amount, and continue.
- Add a new card.
- Fill in the needed information.
If your country is against using crypto as a means of payment, you’ll see the below image after filling in your card information.
The only option for those in a country that can’t use a Visa/Mastercard for crypto purchases is by using the auto-investing strategy. This makes use of USDT and BUSD stable coins as against Fiat for the crypto purchase.
Benefits of Using Recurring Buy.
- Takes Away FOMO. The fear of missing out is a major issue in the crypto space. No one loves missing out on a potential gain, and no one knows when that pump will happen. The strategy helps you build a position in a way that gives you an edge over making hasty decisions.
- Reduces the risk of market volatility. The high rate of volatility in the market can lead to a negative return on investment. Instead of going all in, scheduling your buys overtime fits in any market condition.
- Gives time to build your portfolio. Buying over time gives you enough time to not only learn but to build a well-balanced crypto portfolio. A recurring buy could go on for months, and till the end of the crypto bear market. Using this strategy is a good way to build strong holdings over time.
Recurring buy is for newer crypto investors who don’t have a lot of money. It is also for someone with a lack of technical skill of analyzing the market, who can’t time the bottom. Also, investors who want to build a long-term crypto portfolio prefer to use recurring buy.
This type of investment does not guarantee a profitable ROI. Every investment comes with a risk. It’s advisable to always do your own research (DYOR) on the intended crypto project before investment.