You actually don’t need thousands of dollars before you can make money from Cryptocurrency. You can invest as little as $20 monthly and come out with over $600 in five months.
In this article, I will show you how to make $631 by investing $20 monthly in BNB using Dollar-Cost Averaging (DCA).
WARNING: This article isn’t for you if you expect to miraculously turn $20 to $500 overnight. If you are not determined and can not discipline yourself, exit this page and go back to what you were doing.
What is Dollar-Cost Averaging?
According to investopedia, Dollar-cost averaging (DCA) is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset’s price and at regular intervals.
E.g. You want to invest a total of $100 in a coin for a period of five months and you do this by setting aside $20 every month from your income to buy the coin. This means you do not go all-in with the $100.
In effect, this strategy removes much of the detailed work of attempting to time the market in order to make purchases of equities at the best prices. Dollar-cost averaging is also known as the constant dollar plan.
With DCA, you can turn thousands of dollars to millions of dollars depending on your duration of investment and discipline.
Who is Dollar-Cost Averaging trading technique meant for?
Dollar-cost averaging is a tool an investor can use to build savings and wealth over a long period.
If you are someone with 9-5 job, busy housewife, medical professional, etc DCA is likely going to be an option for you if you care to make money in the Cryptocurrency market.
- RECOMMENDED COURSE: How To Trade Cryptocurrency Like A Pro In Nigeria (Register Here).
How to do Dollar-Cost Averaging Crypto Investment
To explain how you can do Dollar-Cost Averaging, I will be making use of Binance Coin (BNB) and five month investment period.
Let’s get started.
Let’s say you want to invest a sum of $100 in total for five months in BNB and your monthly income is $120. To use DCA technique, it means you spend $20 to buy BNB at the opening of every month without selling the coin until the closing of the fifth month.
Now, let’s do the calculation.
We will start the calculation from October, 2020 till February, 2021.
Please, pay attention here.
Calculation of how to make $631 by Investing $20 monthly in BNB
1). October, 2020.
BNB opens at $29.2696. When you buy at the opening price, $20 will give you 0.6833BNB.
HINT: Divide the amount you have (in this case $20) by the exact value of the coin at the time you want to buy it.
2). November, 2020
BNB opens at $28.5058. When you buy at the opening price, $20 will give you 0.7016BNB.
3). December, 2020
BNB opens at $31.4935. When you buy at the opening price, $20 will give you 0.6350BNB.
4). January, 2021
BNB opens at $37.3596. When you buy at the opening price, $20 will give you 0.5353BNB.
5). February, 2021
BNB opens at $44.291. When you buy at the opening price, $20 will give you 0.4511BNB.
BNB closed at $210.2138 in the month of February.
At the end of the fifth month, see the final calculation.
- Total Invested Capital: $20 x 5 months = $100
- Total BNB for the 5 months: 0.6833 + 0.7016 + 0.6350 + 0.5353 + 0.4511 = 3.0063
- If you sell your BNB at the February closing price ($210.2138), you’d made $631.96 ($210.2138 x 3.0063)
Now, if you know how to do Technical Analysis, you’d have caught the price when it rose to $348 per 1 BNB in February. If you sold your 3.0063BNB then, you would have made $1,046 ($348 x 3.0063).
That’s a lot of money if converted to Naira!
Dear friend, imagine if you could afford to set aside $30, $50, $75 monthly. You can do these for any coin of your choice but I recommend you go with any of the top 15 coins on coinmarketcap.com.
Wrapping up how to make $631 by Investing $20 monthly in BNB
This article has revealed to you that setting aside just $20 monthly for cryptocurrency Investment for five months would have made you extra $531 if you could afford as little as $20 per month and if you know nothing about cryptocurrency trading and Technical Analysis.
If you have bigger financial goals, you can do it for 12 months or more.
Have any question, different opinion or clarification? Kindly drop them in the comment box.