TL;DR- Login to your BlockFi account and hit the trade text on the top menu. On the window that pops up, hit the repeat trade at the bottom of the window. Select the frequency with which you’d like to buy. Finish entering the amount and select buy. Scroll down for the full step-by-step with screenshots.
Note: I’ve found BlockFi bakes in fees to the buys by selling crypto at 1-2% more than the market rate- usually around 1.0%-1.5%. This is exactly on par with what Coinbase charges for its bank account buys, so it’s a ‘pick your poison’ kind of thing. Personally I prefer BlockFi because they have the lending/interest-bearing accounts.
BlockFi fees vs. other exchanges
It’s no secret that most crypto exchanges are cashing in on the explosion of investor interest in crypto, with outrageous fees. Coinbase, Voyager, and Gemini seem to be the worst offenders.
With BlockFi, the platform is charging a hidden fee by giving you an inflated rate with crypto purchases. Allow me to show you below.
We can see from CoinMarketCap that Ethereum is trading at $3,069.96:
But when I go to buy on BlockFi, BlockFi gives me a price of $3,096.71:
Which is a difference in price of about 0.87%, to BlockFi’s benefit (and our detriment).
So are you willing to eat this fee for the recurring buy? Not financial advice, but I think it to be worth it given BlockFi has easy ways to earn interest.
Is BlockFi safe?
I consider BlockFi to be one of the safer crypto entities out there, but there’s always risk. BlockFi is held by Gemini crypto, which is licensed as a bank under US and New York law. This means Gemini insures its accounts with FDIC insurance up to $250,000, but I can’t find anything saying this applies to BlockFi accounts too. My personal approach is to never keep all my holdings in one place in case some sort of cryptopocalypse happens.
The other consideration with BlockFi is that it’s under scrutiny from several state governments. You can’t get BlockFi lending if you’re in New York or a few other states. BlockFi was ironically founded in New Jersey, where it is no longer licensed to operate.
Dollar Cost Averaging (DCA) and why you should do it
If you’ve been in crypto for more than five minutes, chances are you’ve seen or heard someone spouting off about DCA.
As most of you are aware, averaging is investing a set amount of money over a set period of time. In practice, an easy way to do it would be to buy every time we are paid, which for most people with payroll employment is once every two weeks or twice a month. An easy solution would be to invest x% of each paycheck in cryptocurrencies.
As I’ve gotten a bit older I’ve found I can’t quite tolerate the risk I used to be able to. So the monthly amount I’ve been putting into crypto is in the low single digits percentage wise from my take-home pay. When I invest in cryptocurrency, I still tell myself that I’m going to lose everything. This way my expectations are low, and I’m thrilled when prices rise. After all, throughout the entirety of Bitcoin’s existence the price has risen given a long enough time horizon.
DCA is doubly important with the volatility that comes with cryptocurrency. DCA’s advantage comes when you can buy dips, and dips come often and are heavy with crypto trading. Don’t worry about day trading and spending countless hours of your time consuming resources online to try and get the ‘right’ coins at the ‘right’ time. Most cryptocurrency price predictions turn out to be wrong. When I first started investing in crypto, I followed several YouTubers and Twitter accounts. I traded frequently and thought that each new small cap coin I saw a video on was truly going to be the next 10x or 100x gainer. I wish I had just bought some large caps and left it alone. It would have been a lot less stressful! The most attractive part of DCA is psychological- I only have to make the decision once to put money in regularly and at fixed times and amounts and then just forget it.
Another added advantage of DCA is the reduced mental burden of not having to remember to do something. Similar to the way autopay makes things easier, DCA removes a task from our busy lives. DCA also removes emotion from investing, which is a known killer. Check the fear and greed index on this page- this is how most investors are feeling about cryptocurrency right now. Since the crypto market is still relatively small and speculative, these emotions have massive bearing. More often than not they hurt investors. If you DCA, you’re removing this factor.
How to set up a recurring buy on BlockFi
1. Log in to your BlockFi account. On the landing page, click the trade button on the top menu.
2. You’re met with the buy window that says enter trade amount. At the bottom of the window, select the repeat trade button. On the repeat trade screen, select when you’d like BlockFi to pull funds from your account and the frequency. I’ll be doing the 15th of every month, since I get a paycheck around that time and I don’t have to put that paycheck toward rent. You can choose every day, every week, once on the 1st of the month, and once on the 15th of each month. Once done selecting frequency, hit confirm.
3. Back on the enter trade amount screen, select the crypto you’d like to do a recurring buy with, and the amount you’d like to buy. I’ll be sticking with Bitcoin, the OG of all cryptos. I’m not feeling super bullish right now so I’ll just stay at $100/month. When you’re done hit the blue ‘buy $xX of [insert crypto]’ button at the bottom of the pop up.
4. Check the box saying you authorize the recurring buy. Hit confirm buy.
BlockFi with ACH (checking account transfer) the specified amount of money at the specified interval. The purchase will be the same each time- whatever you selected. For me, it was $100 of Bitcoin. So on the 15th of every month my BlockFi account will increase by $100 for that moment. I’ll consider lending that Bitcoin to make interest on it!
Now sit back and watch the miracle of DCA take place. This is the hard part- the waiting, fighting that urge to check crypto prices on your phone every five minutes. But the whole purpose of DCA is to let the investing happen automatically and then forget it.