Crypto startups offer SIP option to battle extreme price volatility

economictimes.indiatimes.com:

If you had invested, say, Rs 50,000 lump sum in Bitcoin in 2017, when it was trading at Rs 12 lakh, you would have had to wait for three years to just break even because the crypto token’s price crashed. But if you had sold the asset when its value sank nearly 80% in 2019, you would have seen a near-total capital wipeout. Imagine you had managed to hold your nerves, the return on your 2017 investment now would have been worth about 150%.

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However, if you had an opportunity in 2017 to put the amount (`50,000) in Bitcoin in a staggered manner like in mutual fund SIPs, the return now would have been 350%. This additional growth in return would have been due to recurring investments in crypto, irrespective of market conditions. Systematic investment plans (SIPs) in equity mutual funds also follow this principle — the stock market cannot be timed, so it is better to keep investing consistently. Bitcoin’s rollercoaster ride can cause extreme loss or profit depending on when one enters the market. There are several investment routes in crypto, including direct buying, exchange-traded funds (ETFs), and interest-generating products, which this column has explained in previous weeks. SIP-like products are another way to invest in virtual assets — aiming to use the volatility to one’s advantage. While some startups call such products SIPs, others use terms like ‘recurring buy plan’. However, investors should be cautious as these products are unregulated, unlike mutual fund SIPs, which are overseen by Sebi.No Need To Time The Market Crypto is a 24/7 market and is