This article is part 7 of 8 in the “Bitcoin in 21 Minutes” series. To start from the beginning, click here.
Lots of people play around with the idea of buying bitcoin, but find it difficult to make an informed decision. They hesitate to buy their first bitcoin by frequently asking:
- Is the price too high now?
- Should I have bought it yesterday?
- Should I wait for the price to dip?
With bitcoin’s price moving so fast, it’s natural to feel uncertain. But if you believe in its long-term potential, worrying about the perfect time to buy isn’t worth it.
When Should You Buy Bitcoin?
A smart way to get into bitcoin is through dollar-cost averaging (DCA), which is a strategy that removes the guesswork of timing the market and helps smooth out volatility.
When you DCA, you’re consistently buying small amounts of bitcoin, whether it’s hourly, daily, weekly, or monthly. At River, we make this even easier and stress-free by automating the process for you. Buy bitcoin on the schedule you choose.
For example, let’s say you want to invest $1,000 each month in bitcoin. With a daily DCA, you’d be buying about $33 every day. So even with small, regular investments, your bitcoin stack can add up significantly.
How Much Bitcoin Should I Buy?
Many people choose to allocate a portion of their portfolio to bitcoin. But how much should you invest?
That depends on a few key factors: your income, financial goals, and how comfortable you are with bitcoin’s ups and downs.
Some start with just 1% of their portfolio, while others who feel more confident go higher. It’s all about what feels right for you and your level of conviction in bitcoin.
For example, a BlackRock analyst recently suggested allocating 28% to bitcoin. And then there are those with extreme conviction, like this family who went all in and sold all their assets for bitcoin.
In the end, deciding how much bitcoin to buy is a personal choice, and it varies from person to person.
One way to figure out your percentage is by using the 50-30-20 rule:
From the 20% savings and investments, decide how much you want to put into bitcoin. If you’re new, start small and increase your investment as you get more comfortable.
When you invest in Bitcoin, you don’t have to buy an entire coin. Even with just a few dollars, you can still get in on the action.
In the “Next Reads” below, how can you be sure Bitcoin is here to stay? What about something with better technology?
Notice: River does not provide investment, financial, tax, or legal advice. The information provided is general and illustrative in nature and therefore is not intended to provide, and should not be relied on for, tax advice. We encourage you to consult the appropriate tax professional to understand your personal tax circumstances.
