Is It Good to Do SIP in Cryptocurrency?

Crypto

SIPs are popular methods of investing in India. In payment terms, SIP is a method where you invest a fixed amount every month. The idea is to stay invested long-term and get the benefits of Rupee Cost Averaging. You can do SIPs even for gold or bitcoin. 

Cryptocurrency SIP is an investment plan that allows a person to invest small amounts in cryptocurrencies regularly. The idea behind investing in cryptocurrency through Systems Investment Plans is to average the price over time and eliminate any drastic impacts on the portfolio’s performance due to market volatility. 

One can start investing as low as INR 100 per month in cryptocurrencies. Top cryptocurrency investments today are Bitcoin, Ethereum, Lite coin, Ripple and many others. Cryptocurrency SIP is similar to investing in stocks or mutual funds but with lower fees and fewer restrictions on withdrawal. 

You can use a crypto SIP calculator to determine your total investment if you intend to undertake SIP in cryptocurrencies. This calculator allows you to estimate the potential return on your present investments.

One of the primary benefits of investing via SIP is that it helps you to diversify your portfolio over time. You don’t have to invest all your money at once; instead, you can set aside a fixed amount from each paycheck and invest it automatically into crypto assets like Bitcoin or Litecoin (LTC). This could be it if you’re looking for an opportunity to grow your money long-term without worrying about market fluctuations or sudden swings. 

Bitcoin, Ethereum, Litecoin, and Ripple are some of the most popular cryptocurrencies. On a technical level, Bitcoin is considered the most popular cryptocurrency, and Ethereum is the second most popular. Litecoin and Ripple follow closely behind them.

Cryptocurrencies can be bought through a SIP method using a cryptocurrency derivative. The DAA is a basket of cryptocurrencies, meaning all are weighted at 1%. If Bitcoin’s price goes up by 10%, then your DAA will increase by 10%.

The benefit of this approach is that you can avoid purchasing specific cryptocurrencies and regularly monitor their exchange rates. So you just have to make one investment into an actively managed portfolio with professional traders doing all the work for you! 

This way, you can sleep peacefully knowing that your money isn’t going down in flames because of any individual coin crashing out of existence overnight—something that has happened before with several coins like Dogecoin and Auroracoin (to name just two).

Is it good to do SIP in cryptocurrency?

Yes, it is good to do SIP in cryptocurrency. Cryptocurrency is a good investment and diversification of your portfolio. You can begin with just INR 100 every month, a small investment amount. 

If you have already invested in mutual funds or stocks and are looking for your next investment option, cryptocurrency should be on top of your list. If you are afraid of investing all your money in cryptocurrency through SIP, you can use a crypto SIP calculator to check your future profit and make a final decision. 

Conclusion

Investing in cryptocurrency through Systems Investment Plans is a great way to build wealth. You can do SIP for equity mutual funds, gold, and bitcoin. The returns will be taxable at the time of redemption. If you hold your bitcoins until maturity or sell them before the end of this financial year, you will have to pay taxes. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.