Systematic Investment in Cryptocurrencies

The systematic investment plan or popularly known as SIP is not just limited to banking but cryptocurrencies too have plans where one can invest in them as per this plan.

What is SIP?

A Systematic Investment Plan or SIP is a process where the institution invests a fixed amount in a mutual fund each month. It averages out your purchase price and protects you from catching a market high, as we explain here. It also protects you from panic if markets crashed because your money is being invested gradually rather than in one go.

SIP being a strictly banking process was, till now foreign to cryptocurrencies. However, with the emergence of newer exchanges, these services are being incorporated, albeit, gradually.

Why SIPs?

When Bitcoin first appeared on the horizon, the entire concept was alien and abhorrent. Any transaction which did not have a physical existence and exchanged hands only on the basis of tokens could never be relied upon. However, that changed in December 2017, when the coin value of BTC touched $20000. That it crashed the following quarter and went down under did not deter early investors from pouring in more. Despite the initial mayhem, it stabilized at around $10000. Despite the market volatility, it regained enough confidence to carve out enormous clout for itself.

One of the other reasons why big investors usually kept away from Bitcoin, was regulations. Cryptocurrency is hardly a decade-year-old phenomenon. It is still in a trial and error mode. Different countries have different regulations and it becomes a challenge for anyone investing to singlehandedly overcome these challenges.

However, the growing popularity of cryptos, especially Bitcoin has ensured that this fear is allayed. Investing in BTC through SIP is yet another indication that the cloud of uncertainty is lifting and investors are less wary of the challenges.

Funnily, one of the reasons that were given behind the reluctance of investing big on BTC was its exact nature or the lack of it. Bitcoin is neither a commodity, even though it’s mined, nor a currency.

One thing that you ought to know while investing in cryptos is that knowledge is the king. You have to get a hang of the charts otherwise it might get risky. Also, cryptos fluctuate, so timing is of great importance. As final advice do not pour in the entire capital into a single token but expand the portfolio.

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