We thought we would share the three most common strategies with everyone below.
Set and forget strategy
By far the most common strategy used is the set and forget strategy. This is where users take advantage of the investment technique, dollar cost averaging, during the present market conditions. In a previous blog we mentioned how beneficial dollar cost averaging can be, especially if you don’t have a large amount of savings and you only want to put in twenty dollars a week.
If you are not sure what dollar cost averaging is, it is simply investing a small amount of money frequently and consistently rather than purchasing everything within your budget all at once. With dollar cost averaging you catch both the dips and rises in the market and therefore average out your investment over the period of time you are investing.
The general strategy we see with this method is an average of $60 a week put in with a 80/20 split of Bitcoin and Ethereum using our distribution slider.
We believe this strategy is perfect if you are just getting started in crypto and want to gently dip your toes in rather than jumping straight in the deep end!
Instant buy then a set and forget strategy
Another strategy commonly used is a combination of both instant buying and saving. These users will usually kickstart their savings with an instant buy of Bitcoin and/or Ethereum of around $500 - $1000 and then begin their weekly savings afterwards.
This provides the benefit of purchasing a large amount of crypto instantly at your chosen time while also taking advantage of dollar cost averaging afterwards.
Using this strategy it may take longer to average out your investment if you inadvertently use our instant buy at a higher price compared to the subsequent weeks however you also may gain substantially if you have bought at a dip.
If you are brand new to Bitcoin and you are implementing this strategy we would thoroughly recommend testing you have backed up your wallet correctly before making your instant buy purchase. This can usually be done through the wallet via the security settings.
Instant buy/Instant sell strategy
There is a smaller group of our users that primarily just use our Instant Buy.
They follow the market closely and either buy small amounts ($50 - $100) multiple times a week when the market dips, or they put in a large $2000 payment.
Generally these users are quite experienced with crypto trading and sometimes use our instant but to send BTC to an exchange and buy other crypto with it. Please note we cannot send ETH to an exchange address when using the ETH instant buy, it must be sent to a personal wallet.
These users will also commonly use our Instant Sell during market peaks to sell their BTC back to NZD.
Which strategy to use?
Overall we generally recommend using either of the first two strategies if you are new to cryptocurrency. Dollar Cost Averaging is a proven investment method that is perfect for current crypto market conditions. It also lowers your exposure as you are only putting in a small amount a week.
If you are more experienced and which to trade crypto with other crypto or buy and sell crypto for NZD then our Instant Buy/Sell feature would be perfect to use. However we would still recommend have a small monthly savings payment going in at the same time.
Please reach out to us if you have any further questions about crypto or Vimba!