This Is What Happens When You Invest in Bitcoin Every Month
Many people may not realize it, but a popular strategy for investing in stocks -- dollar-cost averaging (DCA) -- can also be an effective long-term strategy for investing in crypto. In very basic terms, you are simply committing to buying the same dollar amount of a specific crypto at regular intervals, regardless of short-term price volatility. You can think of this as a "set it and forget it" crypto investment strategy.
This strategy works best, of course, with a cryptocurrency such as Bitcoin (CRYPTO: BTC) that has the potential for long-term price appreciation. In fact, some crypto investors say that Bitcoin is really the only crypto that is suitable for a DCA investment strategy. So what would happen if you decide to buy a specific amount of Bitcoin every month?
One way to see how well this Bitcoin investment strategy might perform in the future is to back-test it based on historical results. There are plenty of online tools that enable you to do exactly that. So, for example, if you had invested $100 every month in Bitcoin for the past three years, you would have turned $3,600 into $8,570. That, despite a huge market downturn this year that would have wiped off a significant portion of your profits.
Source Fool.com
