They say don't put all your eggs in one basket, which in the investment world means diversify your investments. I love that, not only because it protects me to some extent in case the sh*t hits the fan, but also because my profit can vary based on the investments.
Photo by Kevin Doran on Unsplash
Some of you may remember that I wrote about my plan to set up a Crypto Retirement Plan this year in July. In other words, I decided to invest $40 worth in BTC and ETH each month. July was the best month to start as BTC went as low as $30k and ETH bottomed out at around $1.8k.
I was able to buy BTC for my retirement fund at $31877 and ETH at $1822. Looking back and doing the math, that's 48% gain on BTC and 120% on ETH (on paper, of course). That month I bought more than $40 worth as it was too good occasion to be missed and invested $70 instead. Since than, I've been buying BTC and ETH every month for the fund, sometimes more than $40, but never less than $40.
Because this is a long term plan as it's my retirement fund, I thought why not stake it, as it sits in my wallet unused after all. Small amounts like these are not worth transferring off into a cold wallet yet as you would pay more on fees than the transferred asset value, so staking on Binance seemed the best option.
This week I noticed Binance has launched the Auto-Invest option, which is kind of similar to my plan, it's just that it's done automatically, if you set up your own plan.
Right now they have only three assets, obviously the two major ones, BTC and ETH as in case of a bear market, these are the safest ones and BNB, which is the native token of Binance.
The process is very simple, you choose an amount, which can be any amount starting from $10, choose a timeframe for the buy, which can be daily, weekly, bi-weekly and/or monthly. The best thing about this is that you can pause the plan, reorganize it if you like, choose a different timeframe or modify the amount you'd like to invest. This is great as you can pause it when your assets are rallying and resume when there's a dip, plus you can modify the amount if there's a serious dip, like right now and you have funds to invest.
The app is automatically updating your Unrealized Gain & Loss, based on market price.
The downside is that you are still locking your funds on a centralized exchange and it's not risk free, but we're talking about small users who maybe don't have other options right now.
As about the APR, those numbers are mesmerizing, but let's not kid ourselves. Those percentages are calculated based on past price actions and we have to also admit that these assets are now closer to their ATH, then to where they were 3 years ago price wise.
ETH had a very long accumulation period starting from December 2018 till mid 2020, that's one and a half year at (roughly) almost the same price range. We're not going to see ETH at the $200 - $400 range, not even in the bear market. I don't see how the price could drop so much honestly.
But the past doesn't matter in this case, what matters is the future as your earnings are not going to be calculated retroactively. No one knows what the future holds for us, what the price of these assets are going to be, but based on TA, it definitely worth investing in them. Also this is not financial advice, nor am I paid to shill this option. It's just my opinion.
For me this is similar to dropping your pocket change in a piggy bank and saving it up in time, just in a different way. The interest rate is different for each tier and small investors are favored here. I suppose after you've reached the 0.05 target, it's wise to start another one. We'll see.
As I said in the title, Binance is listening to me, they are going to do the job for me :) On a more serious note, assets are better off in cold wallets. Your key, your crypto. Not your key, not your crypto.
