Binance — Recurring Buy | Benefits of Dollar-cost Averaging (DCA)!
One of the common questions of new crypto investors is when is the right time to invest. As you already know, the crypto market is very volatile and a 5–10% move is kind of normal so it’s impossible to answer when is the right time to invest.
As we can’t predict the bottom, most of the time, we end up buying too early or we miss the train. The solution to this problem is Binance Recurring Buy. Recurring Buy allows you to DCA a.k.a. invest a fixed amount at a pre-set time interval.
What is Dollar-cost Averaging (DCA)?
Dollar-Cost Averaging (DCA) is an investment strategy where an investor invests a few percent of their total investment amount at a regular interval instead of investing the total amount all at once.
DCA helps you to lower the average entry price of an investment. It also decreases your stress level because you don’t need to monitor the market to find the perfect entry.
How Does DCA Work?
Suppose the current price of ETH is 1000 USDT and You want to invest 2000 USDT in ETH. You will get 2 ETH if you will invest 100% amount at the current price.
Now Let’s see how many ETH will you get, if you will do DCA instead.
For this example, suppose the price of ETH is decreasing by 100 USDT every month and you want to invest 400 USDT/Month for the next 5 months.
After 5 months of DCA, you will have 2.5825 ETH (0.4 + 0.4445 + 0.5 + 0.5715 + 0.6665). You will have 0.5825 more ETH in DCA investment compared to the total investment at once.
For this example, suppose the price of ETH is increasing by 100 USDT every month and you want to invest 400 USDT/Month for the next 5 months.
After 5 months of DCA, you will have 1.6925 ETH (0.4 + 0.364 + 0.335 + 0.3077 +0.2858). You will have 0.3075 less ETH in DCA investment compared to the total investment at once.
As you can understand from the above two examples, DCA helps you to earn more profit when the market is in a downtrend. However, you can also miss high-profit opportunities in the uptrend.
Note: The market never goes down continuously neither does it go up. DCA is the best strategy for those who want to invest for the long term like 4–5 years or for those who can’t decide when to enter and when to exit.
Also, If you can’t afford to purchase 1 ETH or 1 BTC at once, DCA is your best friend.
You may have also heard this saying, “Boond Boond Se Sagar Bharta Hai”.
English Translation of the above saying “Drop by Drop Makes an Ocean”. So just keep DCAing and you will achieve your bigger goal.
What is Binance’s Recurring Buy?
Recurring Buy allows you to choose the cryptocurrency you want to invest in, amount you want to invest and interval of the each investment.
Benefits of Recurring Buy →
- Recurring Buy helps you to decrease the risk of market volatility and gives you steadily growth in a long-term.
- You don’t need to monitor the market manually. You just need to customize a few settings and your automatic investment plan will start within a few minutes.
- Also as I said earlier, Recurring Buy decreases your stress level because everything is automatic.
Steps To Setup Recurring Buy →
You just need a credit/debit card to set up a recurring buy. If you have a credit/debit card, Open the Binance App → Open More option(or You can open Credit/Debit Card) → Recurring Buy.
OR You can directly click on this link to visit Binance Recurring Buy Section.
Select Coin → Choose the crypto you would like to purchase in a regular interval.
Enter Amount → Enter an amount you want to invest in a regular interval. You can also choose different currency. Binance Recurring Buy supports over 40+ fiat currencies.
Investment Frequency → You can choose between weekly, bi-weekly or monthly intervals. You can also select the day and time for your Recurring Buy. Then is the interval(or time) when Binance will purchase crypto automatically for you.
Payment Method → Binance currently accepts payment using Visa or Mastercard credit/debit card. On the next page, Enter Card Details and Complete The Payment.
Done. You have successfully set up recurring buy.
Recurring Buy Problem →
The problem with Recurring Buy is some banks(or countries) don’t allow you to do a crypto transaction using credit/debit cards.
For example, Indian Banks don’t allow us to do any crypto-related transactions so we can’t set up a recurring buy.
The solution to this problem is the Binance Auto-Invest feature. Auto-Invest works similar to Recurring Buy. Here you can use your wallet balance instead of credit/debit cards. I will try to write a separate article on Auto-Invest.
Now, This article has come to an end. I hope you found this article helpful. However, if you have any queries and questions, please ask in the comment section below.