Buying $10 a Day Worth of Ethereum: Is It Profitable?

in LeoFinance2 months ago

Buying $10 a Day Worth of Ethereum- Is It Profitable?.png

The idea of buying crypto is scary to many people. How they should buy and when they should buy are the first two questions that crypto newbies tend to ask.

With the latest run in crypto, I've been talking again to many people who know that I'm highly involved in crypto. These people are friends, family, Twitter people, etc. Everywhere and anywhere.

When Bitcoin spikes, people come out of the woodwork looking to get involved.

So yesterday, I published a post answering these two very important questions. In fact, the answer - to buy $10 worth of BTC per day no matter what - is the exact advice that I have given out for years now.

The post I did yesterday explored some research that I put together about the historical performance of this strategy. I think it's extremely important to illustrate this idea that you can be a successful crypto investor without actually having to spend all your time here in the space.

I got a lot of interest in yesterday's post - from friends/family and on social - so I thought it would be interesting to follow-up with a study of this strategy for Ethereum, BAT and HIVE.

In this post, we'll take a look at buying $10 worth of ETH each day for the past 2 years and see how it performs:

Dollar Cost Averaging - $10 Worth of ETH Each Day for 2 Years

If you're curious about how I get this data, I download the historical price and then just plug it into a spreadsheet and simulate the purchase of $10 worth of ETH each day. The daily buy simulation looks like this:


If you bought $10 worth of ETH every single day for the past 2 years, you would have ended up buying 41.211 ETH in total at an average price of $177.62/ETH. Spending a total of $7,320 USD.

Today, ETH is worth about $330-$345 USD. I input $335 for the current value figure (simulating what you might sell it for if you liquidated today) and your 41.211 ETH would be worth $13,805 USD.

So in 2 years, you would have gotten a 88.61% return on your initial investment (44.30% annualized).

To give this 44.30% per year figure some context... let's compare it to the Bitcoin simulation I ran yesterday:

Investing in ETH has been more profitable than investing in BTC (at $10 per day). This is not to say that you should only buy ETH or only buy BTC, but rather to add some context to the annual return of the top cryptocurrencies.

If you want to take this a step further, consider that many index investors, hedge fund/mutual fund buyers, etc. earn an industry average of 6% per year on their equity portfolios.

Would you rather take a low risk investment and make 6% per year or take a higher risk investment and make 44.30% per year or 33.79%?

Preserving Wealth vs. Building Wealth

I think some mix of those investments is the correct answer (for most people), but it boils down to personal risk tolerance and investment objectives. If you've got a lot of money, then opting for 6% might be all you need to preserve your wealth.

If, however, your goal is to build wealth as opposed to simply preserving what you've already got, then you need to be informed about strategies of investing that involve a higher level of risk but a higher level of reward.

In my opinion, cryptocurrencies are one of the most asymmetric risk/reward opportunities in the world. The potential is validated by this research.

Strategies like buying $10 worth of ETH or BTC every day regardless of price are mainly for the people who are interested in investing in crypto, but don't want to take the time to be involved heavily in the space.

There are many people out there who fall into the category of people who:

  • want to build wealth
  • earn a steady income
  • are open to alternative assets
  • don't have time to check crypto prices each day

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This is powerful, how about buying $10 of Hive daily?

very good thought. but Hive is way down the list on cmc plus the fact that it is harder to buy. On coinbase you can just set the daily buy and let it run. More manual labor on hive.

Definitely more manual labor for HIVE.

I pulled the data and found that you would've made a negative ROI each year buying $10 a day of HIVE (but keep in mind that it uses STEEM price data up until March 23rd).

If you run the report with just straight buying and no earning (and let's face it, earning an APY on HIVE is often what makes the investment worthwhile), then it's a loss.

If you run it with buying + earning a 12-15% APY, then the investment is profitable.

It's all a matter of perspective, but clearly the motivation for investing in HIVE needs to go beyond short-term profits and go toward things like building a community, business or personal brand (in my opinion).

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I like the way you think! :)

I just published one about it :)

I put a little twist on the report though and talked about buying $10 of HIVE and powering it up on the first of every month

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And I just finished reading it! It was on the spot answer! I do agree putting HPUD as a case relatively how Hive-economy works unlike other blockchain.

These are brilliant man.

Such an awesome example of how anyone can get into the game.

Appreciate it!

I had fun showing this off to friends and family. Got some to start a Bitcoin drip fund who had never previously owned any.ETH is a bit of a harder sell and HIVE is harder still. I'll keep trying though 💪🏽

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DCA is a nice strategy if you want to invest and don't really want to obsess about the markets. Pretty impressive numbers on both BTC and ETH, especially when you consider how crazy the prices were at certain times.

Posted via | The City of Neoxian

Very informative post. Thank you

Imagine putting it in nexo 6% apr along the way 👌

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There are many people out there who fall into the category of people who:

want to build wealth
earn a steady income
are open to alternative assets
don't have time to check crypto prices each day

I'm all of this, except for the last part, of course I do have the time. In all honesty, hive is one of those places where you can build wealth and the potentials stick.

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I just buy 150 of BTC every month. Might just double that to get to roughly the same of 10 per day and it has been a nice move on my part especially now we broke 10k

it is a good strategy, i do not buy on regular basis

Consistency is key in everything we do in our short life.

Because everything compounds.

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I normally buy 250 euros every month, which is a little shy of $10 per day, I was able to start buying since BTC was at $3100, which is awesome since I'm up by a lot!

I wonder if you can automate this tool and put it on one of the frontends for people to use.

This stat is impressive, and I'm beating myself not to have had this understanding before now. However, I'll be adopting this strategy weekly instead of daily. Buying $50 every week with my card on Changenow does not seem like a terrible business to do.

Thank you for sharing.

Wow, this is very educational. I haven't been able to buy much crypto until the past few months only. I also never thought that I should buy an X amount a day of one of the coins to make a profit. But after reading this post, I think I might start buying ETH as an investment and see how that works out. Thank you for this post, I'm going to reblog it :) Have a nice day!