Bitcoin, introduced in 2009 by the pseudonymous Satoshi Nakamoto, is a decentralized digital currency operating on a peer-to-peer network. Using blockchain technology; a distributed ledger system, Bitcoin ensures transaction security and transparency, revolutionizing digital transactions by operating independently of traditional banks and governments.
Bitcoin has proven to be a remarkable asset, being the best-performing asset of the last decade with returns significantly surpassing those of traditional assets like the Nasdaq 100. Due to its decentralized nature and a limited supply of 21 million coins, bitcoin is becoming increasingly appealing as a store of value and a hedge against inflation, especially in Africa.
The fundamentals of Bitcoin
So, what exactly gives Bitcoin value? Here’s a breakdown of its core attributes:
- Limited Supply: With only 21 million bitcoins ever to be mined, scarcity contributes significantly to its perceived value and guides against inflation.
- Decentralization: Free from central bank control, bitcoin offers a level of independence and security not found in traditional currencies.
- Security: The blockchain technology underlying Bitcoin makes it incredibly secure and resistant to fraud.
- Transparency: All Bitcoin transactions are publicly recorded on the blockchain, ensuring transparency and accountability.
Dollar-Cost Averaging (DCA): A Smart Strategy for Bitcoin Beginners
Given the volatility of the digital currency market, new investors might find it daunting. This is where Dollar-Cost Averaging (DCA) comes in as a powerful investment strategy. DCA involves investing a fixed amount of money into Bitcoin at regular intervals, regardless of the market price, to reduce the impact of market fluctuations on your overall investment.
Let’s illustrate this concept with an example.
Imagine Bella decides to invest $100 in Bitcoin every month for a year, between 1st April 2023 to 31st March, 2024.
Source: https://dca.bitnob.com/
At the end of her one-year savings plan, bitcoin’s market price has increased to$71,354.85, and Bella has accumulated a total of approximately 0.0385 BTC at $2,728.29 value, having invested $1,300 through her DCA strategy. That’s a whopping 109.87% ROI.
The strategy basically helps average out the overall cost per bitcoin and reduces the risk of investing a large sum at an unfavorable time, which will ultimately lead to a more favorable long-term investment outcome.
Bitnob: The Best App for Bitcoin Dollar Cost Averaging
Bitnob offers automated savings plans, allowing users to set up recurring bitcoin purchases at regular intervals. This promotes a disciplined approach to long-term savings. Bitnob’s user-friendly interface makes it easy for both beginners and experienced investors to navigate the platform, create accounts, deposit funds, and initiate Bitcoin savings plans with just a few clicks.
How to DCA Bitcoin on Bitnob
- ) Download the Bitnob app and fund your USD account using Kenyan Shillings.
- ) Create a Savings Plan: Tap on “more” in the quick links section, then tapon “Savings.”
- ) Set Your Plan: Choose “Create Savings Plan,” select “Bitcoin Savings,” and give your plan a name.
- ) Determine Your Investment: Select an amount to save (starting with as little as $1).
- ) Set Frequency: Choose to save daily, weekly, or monthly.
- ) Lock Period: Set a lock period for your savings (3 months, 6 months, or a year).
Conclusion
Bitcoin’s innovative technology, combined with its limited supply and decentralisation has positioned it as a powerful financial tool. By understanding the core principles of bitcoin and adopting a strategic approach like Dollar-Cost Averaging (DCA), you can confidently navigate the exciting world of bitcoin.
Bitnob, with its user-friendly app and commitment to security and transparency, is the perfect platform to embark on your bitcoin investment journey. Download the Bitnob app today, set up your automated DCA savings plan, and start building your Bitcoin portfolio for the future.
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