It doesn't matter if you are a novice to cryptocurrencies or already an experienced trader. The thing is that timing the market to invest in a crypto is no easy task. Well, I would even say that it is impossible because you never know if crypto prices will go up or down after you bought. Crypto is just too volatile for any short-term predictions.
That's why I recommend using the dollar-cost averaging strategy when you plan to invest in crypto.
Let me explain this is beneficial and how it works with Binance Auto-Invest
Benefits of the Dollar-Cost Averaging Strategy
Let's say you have $1000 that you want to invest in crypto. One thing that you can do now is investing the whole amount all at once but I doubt that this is a smart move when it comes to cryptocurrencies because you do not know if you did the timing right. Cryptocurrencies are simply extremely volatile assets.
It would be smarter to split your $1000 into smaller amounts and buy on a frequent basis. Instead of doing one big move, you are entering the crypto market gradually. For example, you can buy weekly 20 times for $50 over the next 20 weeks. When you do this, you reduce the volatility and take advantage of the so-called dollar-cost averaging strategy.
By reducing the influence of volatility over your investment you are also reducing your risk exposure. Such a dollar-cost averaging strategy has the potential to reduce the average cost of the total amount of your purchased cryptocurrencies.
What is BINANCE Auto-Invest?
Binance Auto-Invest allows you not only to invest in crypto automatically and regularly but also to generate passive income on top.
Select the cryptocurrencies that you want to invest in with an amount and a timer-interval determined in advance. Once you have set up your Auto-Invest plan, you can start taking advantage of the dollar-cost averaging strategy and accumulate your crypto.
At the same time, you will start generating passive income on your crypto purchases as they are automatically earning interest from Binance Flexible Savings. This is a big benefit of the Binance Auto-Invest plan as earning interest on your new crypto purchases also happens automatically while you can redeem your crypto any time.
Once you have set up your Binance Auto-Invest plan, you can simply lean back and watch your portfolio grow over time without having to be active all the time. This is not only simple but also quite smart. ??
How To Set Up Your Binance Auto-Invest Plan
Setting up your own Auto-Invest plan on Binance is quite easy. First of all, you need to navigate to the Auto-Invest page on Binance under the "Earn"-Tab.
Now choose the cryptocurrency that you want to set up an Auto-Investment plan for and click on the yellow "create a plan" button.
Currently, you can set up an Auto-Investment plan for Binance Coin, Bitcoin, Ethereum, Solana, Cardano, and Polkadot. If you want you can create an Auto-Invest plan for just one or for all six cryptocurrencies available.
As Binance Auto-Invest is a very new product on Binance, there might be more Auto-Invest products coming up in the future.
After you have clicked on the "Create a plan" button such pop-up window like this one for creating a $BNB Auto-Invest plan will appear.
Choose the amount that you want to invest frequently and your preferred stable coin, either $BUSD or $USDT. You should hold your preferred stable coin either in your spot wallet or in your flexible savings account on Binance.
Then go on and select the recurring cycle on how often you want to buy your chosen cryptocurrency. It can be on a daily, weekly, bi-weekly, or monthly basis. Click the "Confirm" button and you are all set up.
Keep in mind that if you do not have enough stable coins on Binance that the purchase will simply fail and Binance will try to make another purchase on the next Auto-Invest date. However, a failed purchase attempt won't cost you any kind of fee. The purchase is just not executed. So there is no risk when it comes to that.
How To Manage Your Binance Auto-Invest Plan
You can check and manage your newly created Auto-Invest plan anytime at your Binance Earn Wallet
Here you have the option to pause your Auto-Invest plan or to remove it completely.
You can also edit the settings of your plan like adjusting the frequency or the purchase amount.
You can check all newly executed Auto-Invest purchases under the
The purchased assets are deposited in your Flexible savings account. From there you can redeem them anytime you want. For example, you can use them for trading or move them to your fixed savings account to earn even more interest on your new assets.
My Final Words
I believe that taking advantage of the dollar-cost averaging strategy by creating an Auto-Invest plan is not only an easy but also a smart solution for anyone who likes to invest in cryptocurrencies, no matter if he is an experienced trader or a novice to the world of crypto.
Finally, I also like to remind you that my intention in this post is to raise your awareness of the dollar-cost average strategy and Binance Auto-Invest and my intention is not to replace your own research.
If you are not registered on Binance yet, you can use my referral link with the invitation code E3PGAJCE for signing up. When you use it, it will save you some trading fees every time you are performing a trade on Binance. Don`t forget about this possibility when you introduce your friends and family to cryptocurrency as it will save both of you some money.
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