1.What is Periodic Investment Plan
Gate.io Periodic Investment Plan is an investment method that features the periodic purchase of coins with a fixed amount of money and a fixed proportion for each currency in a portfolio. The strategy of purchasing at different times could lower the risk of high price compared with the one-off method, and a fixed amount of money helps to average the cost. Favorable investing strategies make it easier for investors to reach their investment goals.
As a widely used investment method, periodic investment is convenient for novice investors and normal cryptocurrency enthusiasts to use and to decide the best time to invest. For senior and professional investors, this method provides an alternative for them to store up coins and reduce investment risks. Gate.io Periodic Investment Plan features one-click investment, flexible portfolio, and redeemable and changeable anytime, which can be considered as veritable “couch-potato investing” and a useful tool to make investments in a fluctuating market.
2.Gate.io Periodic Investment Plan
Suppose Kate was a novice investor in cryptocurrency. She was bullish on BTC but had no idea when to invest. After knowing Gate.io Periodic Investment Plan, she decided to use it to help her long-term investment. On July 1st, the BTC price was 4,000USDT. Kate placed an investment order of automatically buying 500USDT's worth of BTC at 12:00 pm on the 1st day of each month starting from July 1st.
In the following three months, the price trend of BTC is shown in the following figure. By October 1st, Kate had invested 1,500USDT in a total of 0.625BTC periodically. She then redeemed all her BTC holdings at the price of 5,000USDT on this day, which brought her a yield rate of 108.3%.
Yield rate = yield/input * 100%
For better understanding, if Kate had a one-shot bought of 0.375BTC for 1,500USDT through crypto lending on July 1 (suppose the price of each BTC on that day is 4,000USDT) and sold all her BTC holdings at the price of 5,000USDT three months later, she would only get a yield of 25%.
This example tells us that a proper periodic investment strategy could help investors appropriately manage risks in a volatile market. It allows you to buy more coins at a lower price with a fixed amount of money and gain considerable earnings. Irrespective of the uptrend, downtrend, and the time of buying, this method will average your cost and bring lower risks, making it easy for beginners to use.
3. Periodic Investment Risks
In this example, suppose the buying price and the selling price remain the same as that of the above example. On July 1st, Kate placed an investment order of automatically buying 500USDT's worth of BTC at 12:00 pm on the 1st day of each month starting from July 1st. In the following three months, the price trend of BTC is shown in the following figure. By October 1st, Kate had invested 1,500USDT in a total of 0.29BTC periodically. She redeemed all her BTC holdings at the price of 5,000USDT on that day, suffering a loss of 2.78%.
However, if Kate had a one-shot bought of 0.375BTC for 1,500USDT through crypto lending on July 1st (suppose the price of each BTC on that day is 4,000USDT) and sold all her BTC holdings at the price of 5,000USDT three months later, she would still get a yield of 25%.
We can see that periodic investment is never a principal-protected method. During market fluctuations, it will bring you a floating profit or loss while averaging your cost, lowering down risks, and possibly bringing higher returns than one-off purchasing. However, when the market price of the asset falls below the buying price, you will suffer a loss of your principal. In a unilaterally rising or bull market, the method will bring you lower returns and even losses compared with the one-off purchasing method. Therefore, investors are strongly recommended to have a thorough understanding of the trading rules before making their investments.
4.Why Gate.io Periodic Investment Plan
·Strict currency screening process: Gate.io Periodic Investment Plan only supports mainstream currencies with good liquidity.
·No position management fee.
·Flexible portfolio management: It allows you to adjust the ratio of each currency according to your preference.
·More precise time setting: It supports five types of investment terms, including daily, weekly, biweekly, monthly, and even hourly.
·Redeemable at any time: No T+1. Not frozen. Redeem anytime you want.
·Gate.io's unique redemption rule is designed to maximize the investment income for investors. Your redemption order will be placed at 99% of the market price as a limit order, and the unfilled portion shall be canceled immediately. This process will be automatically repeated every two minutes until all shares specified by the user are redeemed. Therefore, the impact of large orders on the market price is minimized and investors with large shares of holdings do not need to worry that their earnings might be negatively impacted.
·GT points can be used to pay the transaction fee.