I. Automatic Investment Theory
Automatic Investment refers to invest a fixed amount of USDT into a coin or a portfolio of coins at regular intervals. For example, one invests 500USDT into Bitcoin on the first day of each month or on each Monday.
In an ideal scenario, a perfect investment is to buy at the lowest and sell at the highest. However, to achieve that in such a complex and changeable digital currency market would be more difficult than catching a knife in the air. As ordinary investors, it is difficult for us to grasp the correct investment timing in a timely and consistent manner. What happens more often is that we buy at market highs and sell at market lows. With Automatic Investment, no matter how the market fluctuates, a fixed amount is invested at regular intervals. And the number of coins purchased is automatically calculated based on its market value, which can lower our average costs and help to achieve wealth appreciation.
On January 1, 2020, the closing price of Bitcoin on the Bibox was 7202 USDT. By December 30, BTC price had climbed to 28,868 USDT, which is four times that of at the beginning of 2020. During 2020, the average weekly price of BTC is 11,235 USDT. If we created the automatic investment strategy on Jan 1st ,2020, on a weekly base, then by the end of the year, the average cost of the BTC we hold is 9863 USD. Through automatic investment, we bought Bitcoin at an average price of 9863 USDT, which is 12.21% lower than the weekly average price. This allowed us to successfully purchase Bitcoin at a "discounted price". And our rate of return will be as high as 28868/9863-1=193%, which nearly have our principal doubled. If the BTC was held until now (January 4, 2021) when the market price is 32,919 USDT, our automatic investment rate of return will reach 234%.
What if we invested in ETH? At the beginning of 2020, the price of ETH was 130 USDT and the price has soared to 736 USDT at the end of the year. In last year, the weekly average price of ETH was 307 USDT. Through automatic investment strategy, the average cost of Ethereum we bought was 246 USDT. We got a discount of 20%. Hold it until December 30, our wealth would triple. If we hold it until now (January 4, 2021), the price of ETH is 1045 USDT, our yield will reach an astonishing 325%.
Digital asset is known as its volatility, and automatic investment can turn volatility into our friend. Under the automatic investment strategy, we are able to enjoy "discounts", enabling us to hold digital assets at a lower cost and obtain excess returns. If you are optimistic about the long-term upward trend of Bitcoin, Ethereum, or any coin, the automatic investment strategy will be of great significance for achieving high return.
On Bibox, you can create automatic investment strategy at ease. You may choose your favorite combination of coins from a list of 104 coins. The investment intervals can be 1 hour, 4 hours, 1 day, 1 week and 1 month. Through Bibox automatic investment bot, investors can choose to a single coin to invested into. In addition, another hidden function of Bibox automatic investment bot is that users can build investment portfolios through it. Each time a automatic investment is created, users can select up to 10 coins for portfolio investment. At each interval, the investment amount will be allocated to each coin according to the investment ratio you set when creating the strategy.
II. Setting the Strategy
Here is a screenshot for setting up the automatic investment bot.
1. Coin types
Bibox Automatic Investment now supports 104 coins, including BTC, ETH, XRP, LTC, ETC, EOS, BIX, NEO, DASH, ONT, BCHSV, ATOM,...
2. Investment cycle
When you set an investment cycle the system will immediately execute the order and repeat the process in the future according to the cycle you set.
The total value set for each investment cycle
4. Investment ratio
In each cycle, the value invested in a crypto = invested value each time * investment ratio
5. Advanced setting
Compared with the average purchase price and purchase amount when the automatic investment is triggered for the first time, if the current price is higher/lower than the average purchase price for the first time, the purchase amount can be reduced/increased according to the setting.
1. After setting the automatic investment bot up, the system will automatically buy with your auto-investment amount and freeze part of your assets in the wallet to make sure your auto-investment will continue carry on.
If each auto-investment amount is less 33.33 USDT, then the frozen amount = (⌈100/auto investment amount ⌉-1) * auto-investment amount. For example, if your auto-investment amount is 33 USDT, the frozen amount would be (⌈100/33⌉-1）*33=99USDT.
Note: ⌈ ⌉ is rounded up.
If the auto-investment value is greater or equal to 33.34 USDT, then the frozen amount should be 2 times the value of each auto-investment amount.
2. Investment process: the system will use the frozen amount first. Once the amount runs up, it will resort to the exchange account. If the balance of the exchange account is not sufficient enough, emails and SMS will be sent to notify you about it. Users need to transfer the sufficient funds to automatic investment strategy to be continued. With insufficient balance for three successive intervals, the bot will be terminated.
3. A single investment strategy supports multiple combinations of cryptocurrencies. You can build your own investment portfolio with up to 10 different coins each time. Please note that total investment ratio must sum up to 100% and each coin’s proportion must be a multiple of 10%.
If you are interested in automatic investment, you may try it out here: https://www.bibox.com/v2/strategy_bot
You can also join the Bibox quantitative analysis group to discuss market strategies with investors around the world https://t.me/bibox_trading_bot