Bitcoin and other digital currencies have come a far way. The bitcoin price has skyrocketed to a new high once again. The last weeks were fantastic for bitcoin. Whenever bitcoin reaches a new high it's easy to question if we are too late to invest. This in combination with guilt - I should've bought some when bitcoin was at $2500 a few months ago - are very common. This is a very short term way of thinking with a high risk.
Instead we are going to take a look at what a full year looks like with an investment of only $100/month. I will do this for Bitcoin, Ethereum and Litecoin. It's easy to replicate this experiment for any other coin.
Please note that this is not financial advise and make sure to only invest what you can afford to loose.
How to set up monthly transactions
If you are new to bitcoin, I recommend to buy them over at https://www.coinbase.com/. This link will also give you an extra $10 free bitcoins on top of your first buy. Coinbase is very easy to use. The only downside are the small fees. More experienced bitcoin traders use exchanges without any fees like https://www.gdax.com/. GDAX is owned by coinbase, which makes it easy to switch your account over when you are ready.
One's your account is set up on coinbase, it's easy to create a recurring transaction in the buy/sell section of the website. Example in the picture below. This will result in an automatic buy of €100 every single month (Yes, I live in an Euro-country :) ).
Bitcoin
Time to start the investment experiment. Let's say you started investing in bitcoin on November 1, 2016. You have been very strict and bought in bitcoin at the first day of the month no matter the price or how the chart looked like. This is what a full year would look like with an investment of $100/month.
| Date | Bitcoin price | Bitcoin bought |
|---|---|---|
| 1 Nov 2016 | $709.84 | 0.140877 |
| 1 Dec 2016 | $744.01 | 0.134407 |
| 1 Jan 2017 | $968.28 | 0.103276 |
| 1 Feb 2017 | $970.73 | 0.103015 |
| 1 Mar 2017 | $1,190.76 | 0.083980 |
| 1 Apr 2017 | $1,082.28 | 0.092398 |
| 1 May 2017 | $1,348.76 | 0.074142 |
| 1 Jun 2017 | $2,348.15 | 0.042587 |
| 1 Jul 2017 | $2,508.08 | 0.039871 |
| 1 Aug 2017 | $2,839.22 | 0.035221 |
| 1 Sep 2017 | $4,792.79 | 0.020865 |
| 1 Oct 2017 | $4,352.15 | 0.022977 |
| 1 Nov 2017 | $6,376.49 | 0.015683 |
Current bitcoin price (09 nov 2017): $7,138.01
Monthly investment: $100.00
Total investment: $1,300.00
Total Bitcoin: 0.909298
ROI: 399.27%
Total asset: $6,490.57
A small investment of $100/month results in $6,490.57 in a year. Wow! It almost sounds too good to be true.
Ethereum
Let's do the same experiment for ethereum. Ethereum had a fantastic year with some unbelievable bumps. Again a simple investment of $100/month with a strict buy-in at the first day of each month.
| Date | ETH price | ETH bought |
|---|---|---|
| 1 Nov 2016 | $10.96 | 9.124088 |
| 1 Dec 2016 | $8.49 | 11.778563 |
| 1 Jan 2017 | $8.16 | 12.254902 |
| 1 Feb 2017 | $10.73 | 9.319664 |
| 1 Mar 2017 | $15.82 | 6.321113 |
| 1 Apr 2017 | $50.04 | 1.998401 |
| 1 May 2017 | $79.02 | 1.265502 |
| 1 Jun 2017 | $230.67 | 0.433520 |
| 1 Jul 2017 | $294.92 | 0.339075 |
| 1 Aug 2017 | $203.87 | 0.490509 |
| 1 Sep 2017 | $383.04 | 0.261069 |
| 1 Oct 2017 | $301.46 | 0.331719 |
| 1 Nov 2017 | $305.88 | 0.326926 |
Current ETH price (09 nov 2017): $317.20
Monthly investment: $100.00
Total investment: $1,300.00
Total ETH: 54.245051
ROI: 1223.58%
Total asset: $17,206.26
Ethereum had a way better year than Bitcoin. A small investment of $100/month results in a whopping $17,206.26! Unbelievable! Am I allowed to swear?
Litecoin
Again, same experiment but this time for Litecoin. A small investment of $100/month with a strict buy-in schedule.
| Date | LTC price | LTC bought |
|---|---|---|
| 1 Nov 2016 | $3.99 | 25.062657 |
| 1 Dec 2016 | $3.89 | 25.706941 |
| 1 Jan 2017 | $4.33 | 23.094688 |
| 1 Feb 2017 | $4.08 | 24.509804 |
| 1 Mar 2017 | $3.77 | 26.525199 |
| 1 Apr 2017 | $6.67 | 14.992504 |
| 1 May 2017 | $15.71 | 6.365372 |
| 1 Jun 2017 | $25.30 | 3.952569 |
| 1 Jul 2017 | $40.35 | 2.478315 |
| 1 Aug 2017 | $43.02 | 2.324500 |
| 1 Sep 2017 | $71.06 | 1.407261 |
| 1 Oct 2017 | $55.14 | 1.813565 |
| 1 Nov 2017 | $55.75 | 1.793722 |
Current LTC price (09 nov 2017): $61.93
Monthly investment: $100.00
Total investment: $1,300.00
Total LTC: 160.027098
ROI: 662.34%
Total asset: $9,909.85
Conclusion
Instead of thinking short term and regretting you didn't buy in at an earlier time, it can be a wise decision to have a strict BUY&HODL strategy as in this experiment. A simple investment of $100/month can result in a nice asset. Ethereum is the biggest player with a whopping ROI of 1223.58%. This was very unthinkable a year back!
On the other hand. Investing the full $1,300 in one go on 1 November 2016 would resulted in the highest ROI. This way of investing is a much higher risk and it's easier to invest a small amount each month instead.
What you do with the asset is up to you. You can leave it for next year and continue investing $100/month. You can also sell all your bitcoin and start over from scratch. Or my personal preference, you can take out everything except $1,300 and continue doing this next year. This will result in a total investment of $2600 next year.
If you had $300 to invest each month and split that equally over these 3 currencies then your total investment would be $3,900. This would leave you with an asset of a whopping $33,606.68!
upvoted! great post and eye opener, dont think the growth will be the same this year because they are more household names now, I always used almost all my money to travel and did so for 4 years, the last couple of months I decided to invest $1000 a month, mostly into Crypto.
Hope in a few years i can travel much more, really see it as long term investment
The results will always be different each year. I started this experiment with the 3 currencies you can buy on coinbase. It really was an eyeopener for me too, since I have always been telling myself I should've bought in when it was at $xxx price.
Good luck with your investment.
Thanks, did you invest yourself ? i just put money in and let it sit there
I am mining bitcoin and ethereum. I am planning to do a monthly buy-in similar to this post.
mining very intresting, does it go well? I am so far behind digitaly so have no clue how that works! hope you make a lot so you can travel much
wierd by the way that 61 people saw you interesting post and only 3 votes
Yeah, the audience is coming from Facebook. I don't think they have an account tho.
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STOPI have not heard of GDAX , thanks for the details explanation.. I will check it out..
Yes! People often think to purchase cryptocurrencies that are already well-established and rather expensive compared to other coins. This is partially due to the fact that the market is seen as volatile and unpredictable, so people may be scared to buy into a currency that they have never heard of or that seems 'small,' in a way. However, that is usually the way to go -- you'll see bigger returns by investing in a currency that is still rather cheap and 'small,' comparatively speaking. There is always the risk that the currency will not reach the heights that one hopes (and it's easy to get sucked into buying FOMO when there are hyper-enthusiastic bloggers, subreddits and Youtubers for nearly every coin). But, with careful research and prudent investments (i.e. only spending money that you can lose), there are a lot of exciting possibilities.