Tony Mallam, Managing Director, upnup.

Over the past few years, many of us have wished we’d bought into Bitcoin a decade ago. Buying a small amount back then would have guaranteed massive returns, even in the wake of the recent crypto winter. Even if you were able to buy a single Bitcoin for the approximately US$4700 it cost in 2017, it’d be worth more than US$23 000 today (approximately R384 000).

Such regrets aren’t rare in the world of investment (just ask anyone who missed out on Naspers shares 20 years ago), but they aren’t particularly helpful either. You can’t go back in time and change what you did. It’s also worth noting that it takes a fair amount of skill and a not inconsiderable amount of luck to spot an investment that’ll take off early on. That’s to say nothing of the fact that it requires a significant appetite for risk, which few of us have.

It would be similarly unwise to go all-in on Bitcoin now in the hopes of another massive upward swing. As with most other investments, a far better approach is to be consistent, investing an amount you’re comfortable with every month and reaping the long-term rewards.

Stress-less investing

While taking big swings at promising investments can be lucrative, it’s incredibly risky. You have to be prepared to swallow significant losses in exchange for those potential wins. It also requires having the time to be an active investor and to look for the signs that tell you when to buy or sell. Most of us simply don’t have that time. And let’s be honest, most of us don’t have the appetite for the stress that comes with it either.

Investing consistently, month after month, is less of a drain on your salary and doesn’t require you to dig into any savings you might have. Even if you put away R100 a month, you’re probably going to be better off than if you’d spent that money on two or three takeaway coffees or after-dinner snacks. Additionally, because you know you’re taking a more passive, long-term approach to Bitcoin, you don’t have to spend as much time worrying about things like price fluctuations. It’s an approach allows people to “set and forget”.

It’s an approach that might seem strange to hardcore cryptocurrency investors, but it’s actually orthodoxy in much of the investment world. People investing in stocks, for example, have long had the option to have their investments be part of an active fund or a passive one. While active funds can outperform a broad market index, especially over short periods of time, passive funds often have better long-term performance.

As cryptocurrencies continue to mature and become less speculative, this will likely be true for them too.

Invest as you spend

Of course, even putting aside a little bit of money every month can be challenging for many South Africans. Given the country’s historically poor savings culture, many might prefer to save and invest as they spend. This allows people to round up their daily spending before putting their monthly accumulation into Bitcoin. After all, we’re spending constantly. So what if we formed a habit to save as we spend?

It’s also an approach that makes Bitcoin seem a lot less daunting and that they’re spending time in the market, rather than having to time the market, allowing their small investments to grow. Perhaps more importantly, however, it sidesteps the problem of people feeling like they don’t have enough money to invest in Bitcoin or that it’s too late to do so.

We believe that if this approach becomes widespread, it may serve to further cement Bitcoin’s viability as an asset class.

No need for regret

To butcher a cliché, the best time to invest in Bitcoin was a decade ago; the second best time is today. In fact, in many ways investing in Bitcoin is better today, if only because there are so many more options available for making investments.

So, the next time you feel regret at not investing in Bitcoin sooner, remember that you can still gain a lot by investing consistently, starting today.