hand putting bitcoin in the piggy bank

Save in cryptocurrency

Øyvind Kvanes23/01/2021

The price of cryptocurrency is very volatile, with many fluctuations. This makes it difficult to save and invest in cryptocurrency. Ever since bitcoin started the whole crypto market, it has been through several so-called "bull" and "bear" cycles. A typical example is a steep increase during one year, particularly during the last months, before the market crashes, often followed by a year of quick decline.

Many people first hear about cryptocurrency when the market starts to approach the end of one of these extreme price increases, which characterizes a "bull" market. That is when the enthusiasm in the market is at its peak. The newspapers write about bitcoin and other altcoins, people discuss it on social media, and everyone is very interested.

We see people investing large sums, often without thinking about it as they really want to take part in this price increase. This is known as FOMO – "Fear Of Missing Out". It is impossible to know how high the price increase will go, and unfortunately many end up investing near the top of the market. In a declining market, people want to buy low, but it’s impossible to know what number that translates to.

The price of bitcoin in USD since 2011 on a logarithmic scale showing big fluctuations.

Dollar cost averaging – DCA

Another strategy, rather than trying to find the lowest and highest velues, is to invest over time, for example through what we call “dollar cost averaging", or DCA. This means that you decide how much you want to invest, and instead of investing the entire amount at once, you divide it into equal parts and invest an amount regularly, for instance every month.

Of course, there is no guarantee that you will make money by using this strategy, but it has historically paid off. After two years, this strategy had paid off for the vast majority. This applied even if people had started investing just before the market experienced a major downturn, a so-called "bear" market. You can find a modeling tool here, which shows you profits and losses related to investing in bitcoin regularly, over time.

Although this strategy has worked well for most people so far, there is of course no guarantee that it will continue to work. This is not to be understood as a recommendation, but as a description of a possible strategy. We recommend everyone to do their own research and not to invest money you cannot afford to lose.

Investment in cryptocurrency over time

When it comes to saving in cryptocurrency over time, there is really no good automated way to do it. Some foreign exchanges support fixed transfer by credit card, but usually charge up to 5-6% or more in fees, which means it becomes very expensive in the long run.

The best thing is to do it manually, but it is important to be consistent. You have to make a deposit every month, or whenever you want to buy. Once the deposit is credited, you place an order in the market and buy the desired cryptocurrency for the amount.

However, this is quite an inconvenient solution, since you have to place each order yourself. In addition, you need to be vigilant. The best months to buy are usually when the price and interest in cryptocurrency is low, but that is exactly when you’re likely to forget.

“Kryptosparing” – Crypto saving

In recent months, we have talked to many people who have told us that they would like to see an easier way of saving in cryptocurrency. They want to invest in cryptocurrency, but they are not traders, and only want to invest a fixed amount over time. They would like to see an equally simple solution for this as setting up a savings agreement in an equity fund.

In response, we want to offer a solution, and have started work on a new product named “Kryptosparing” – Crypto saving. It will initially be a very simple solution. Here, you can set up an automatic transfer to an account with us with the desired amount and frequency. The amount in NOK you transfer to your account with us are automatically invested in the desired cryptocurrency. We will return with more information about terms, costs and how the invoices are carried out closer to the launch date.

The plan is to only support bitcoin from day one, i.e.100% of the funds you transfer will be invested in bitcoin. In the long run, we want to let you choose how much of the investment should be in different cryptocurrencies. If you want to invest in a cryptocurrency that is not yet supported by us, please contact us.. We are currently in the planning phase of integrating new cryptocurrencies.

Register your interest

We will initially roll out this product to a small group, who will submit feedback to us. If you are interested in being one of the first "crypto savers", feel free to contact us! We will then send you an invitation to test the product as soon as it is ready.