Bitcoin's Volatility: How to Invest Without Underperforming
Investing in Bitcoin can be daunting due to its volatility. A study by Morningstar found that the average investor dollar allocated to spot Bitcoin exchange-traded funds (ETFs) lost 5.8% annually from January 2024 through June 2026, while those funds returned 8.5% a year on aggregate.
The author of the article suggests using dollar-cost averaging, making five separate scheduled purchases of $200 at intervals of one or two weeks to allocate $1,000 over a maximum of two months. This approach helps cope with volatility and psychologically prevents buying Bitcoin as a 'crypto lottery ticket' that could explode in value overnight.
A 2026 study by Vanguard found that lump-sum purchases were superior to spread-out purchases up to 73.7% of the time. However, this doesn't bother the author, who emphasizes the importance of not getting scared into selling during volatile periods and instead holding onto Bitcoin for years.