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I am looking for options to reduce the impact of volatility on the portfolio while accumulating Bitcoins over years.

In comparison to ETF funds, we have options such as TIPS where volatility is reduced through different measures.

If I want to maintain long-term long position in bitcoins, what are my options? Is the best idea to use some LP pairs from decentralised finance or DCA peridiocally or buy assets denominated in BTC or some other idea?

What are options to volatility-reducing investing strategies in Bitcoin?

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2 Answers 2

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  • localbitcoins - cheap - spread cost min 2.5 % + 1 % (transaction fee) but more time and your work. Big market.
  • Bitpay (used by Airbaltic company) - easy, but more expensive.

Waiting for better decentralized bt systems still. Etc K.im coming.

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This is a reply to @Murch, who edited this 5-year-old question into a different question.

To reduce volatility while buying, you can give up some growth by splitting the buying over a time period, instead of buying up front. This is called Dollar Cost Averaging.

This has the effect of the same dollar amount buying more BTC when it is cheaper, and buying less when it is more expensive. But it comes at the cost of the BTC price growth while you are not invested.

Bitcoin spends 80% of its time at 20% drawdown or worse, compared to its all-time high, and has much higher volatility than the stock market, so it might make more sense to DCA rather than invest up front.

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