Introducing our Recurring Buy feature

Bitvavo11 ene 2024

With markets fluctuating, trying to time the market is a difficult task for even the most seasoned investors. That's where the cost averaging method comes into play.

With our Recurring Buy feature, you can benefit from cost averaging while providing full flexibility and control over your investments. In this blog, you can read more about cost averaging and the available assets for this strategy.

What is the cost averaging strategy?

Cost averaging is an investment strategy that involves regularly investing a fixed amount of money over a period regardless of market fluctuations. It removes the need to time the market by spreading out your investment purchases, thereby averaging the purchase price over time. Another advantage of cost averaging is that you don’t have to invest a large sum of money at once, but can steadily spread it out across a timeframe.

How does cost averaging work?

When investing, you can choose to invest a sum at once - also called the ‘Lump Sum Investment strategy’ - or continuously invest a smaller amount over time. Let’s bring both strategies to life with two examples.

Lump Sum Investment strategy

Let’s say you want to invest € 3,600 in the coming year and decide to invest it all at once. The assets you want to buy, cost €40 per asset, resulting in the purchase of 90 assets at once (see table below).

Cost averaging strategy

In this example you also want to invest € 3,600 in the coming year, however, you will now spread this amount evenly between 12 months. This means you will invest € 300 every month. The asset you want to buy will change in price over time (see table below). With this, you average the purchase price and diminish risk.

Recurring Buy at Bitvavo

Starting with as little as € 5, you have the freedom to create a weekly, fortnightly or monthly Recurring Buy. Moreover, you can easily adjust the investment amount, skip and cancel a Recurring Buy execution when needed, and create multiple plans tailored to your financial goals.

Eligible assets for Recurring Buy

We kick off our Recurring Buy feature for ten different digital assets. At a later stage, we will add more assets. For now, these assets are available for cost averaging: