DCA strategy and automatic investments in cryptocurrencies on Binance [Crypto 101]

Not everyone has the time to invest full time. Some people just want to regularly buy cryptocurrencies for a certain amount, preferably automatically. This is where the Binance exchange and its automatic investments feature comes in handy. It allows you to automatically buy cryptocurrencies for a given amount and at the same time use the DCA (dollar cost average) strategy. In today’s article, we’ll explain what Binance auto investments are, what their benefits are, and walk you through the process in detail, step by step. So let’s go !

DAC strategy. What is it and what are its benefits?

Suppose you have 1000 zlotys which you want to invest in cryptocurrencies. You can invest the entire amount at once. However, it’s not very smart. This market is so volatile that it can never be you can’t be sure to enter it at the right time.

A much better way is to divide this amount into several transactions and buy new coins regularly. Instead of one big purchase, you can make a small purchase, but gradually. For example, you can buy cryptocurrency 10 times 100 PLN in the next 10 weeks. In this way, you will benefit from the so-called DCA (Dollar A Average) Strategy and you reduce volatility.

By reducing the impact of volatility on your investment, you also reduce your exposure to risk. This way you can also effectively reduce the total average cost of the cryptocurrencies you buy.

One of the exchanges that allows you to automatically buy cryptocurrency and use the DCA strategy at the same time is the world’s largest trading platform – Binance and its Auto-Investments feature.

DCA Strategy
An example of how the DCA strategy works

What are automatic investments in Binance?

Binance Auto-Investments not only allows automatic and regular placement in cryptocurrencies, but also to generate passive income. To use this feature, all you have to do is select the cryptocurrency and the time frame. After setting up your plan, you can start using the dollar averaging strategy and accumulate your tokens.

As we mentioned, you can also generate passive income at the same time. All you have to do is use another Binance product operating in the same ecosystem – Binance Flexible Savings. The fact that both products come from Binance has an undoubtedly important advantage. Earning interest on your new cryptocurrency purchases also happens automatically. Moreover, you can also profit from your tokens at any time.

Once you’ve set up your Binance Auto-Invest plan, you can just sit back in your chair and watch your portfolio grow. You don’t have to sit in front of the computer all day staring at five monitors with graphics. It should be noted that this is a solution for people who believe in increasing the value of cryptocurrencies purchased in the long term.

How to automatically buy cryptocurrencies on Binance?

Setting up your own automatic investment plan on Binance is easy. To get started, you need to hover your mouse over “Revenue” and click on “Binance Revenue”. Then select “Auto-Investments” or simply click on this link.

binance car investment 1

Now select the cryptocurrency for which you want to set up the plan and click on the yellow “Create plan” button. Here you will also be able to see the simulated ROI over different time periods. Of course, this data is provided for informational purposes only. This does not mean that they are in accordance with reality.

binance auto investing

Currently, it is possible to auto-invest in Binance Coin, Bitcoin, Ethereum, Solana, Cardano, and Polkadot. If you wish, you can create an automatic investment plan for just one or all six available cryptocurrencies. It should be noted, however, that this is a relatively young product. Knowing Binance, the company will continue to actively develop it with new coins.

After clicking on the “Create plan” button, a window will appear as shown in the image below. Here you need to enter the subscription amount (and select the appropriate stablecoin you want to make purchases with), select the periodic cycle (daily, weekly, bi-weekly or monthly) and the time at which it should repeat. On the right side, you will also find a cool feature, namely “Use Flexible Savings Balance”. If you use it, if your cash balance is insufficient, automatic investments will be made from the flexible savings wallet.

automatic investments in cryptocurrencies

Click confirm and you’re done. Congratulations, you have just set up your first self-investment plan!

You can view and manage it at any time in your Earn Wallet. From here, you can pause your plan, delete it entirely, or change its frequency and amount.

In the History tab, you can check all new purchases made under the Auto-Invest plan. Purchased coins are deposited into your flexible savings account. You can trade or block them in “Permanent Staking”. In this way, you will increase your interests by earning even more.

Summary

Using the dollar averaging strategy by creating an automatic investment plan on Binance is not only easy, but also a smart solution for any long-term crypto investor. It doesn’t matter if he is an experienced trader or a layman in this world. Test auto-investments ->

If you don’t have a Binance account yet, check out our full guide that will walk you through the process. You will find it on this link.

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