Using Bitdroplet, anyone can automatically buy BTC like an SIP. User can setup a goal, amount, frequency of investment under the “Systematic Purchase Plan”, it can also be redeemed at any time. Adequate USDT Balance has to be maintained for automatic investment.
There is no denying that Crypto assets like Bitcoin are one of the most volatile investments in recent times. The price of one bitcoin hit almost US $20000 in 2017 and then US $3300 in March-April 2019. When I started writing the article BTC had just hovered above $10000 but at press time, it has dipped to almost $8600.
Such is the price action that those who FOMOed in on BTC at $15000-20000 have still not seen the value of their investment back. Some investors advocate “Buying the Dip”, but you will eventually run out of money or patience to buy every drop. That’s where a systematic plan to invest in crypto is relatively better in the long run.
I earlier wrote about how I bought BTC between October 2018-July 2019 systematically every month instead of just randomly buying it and made 100% profit. The only problem was, I had to buy it myself every month. There was no automatic way of investing money in BTC at periodic intervals. Until December 2019. That’s when I started by SIP with Bitdroplet to test it out, since Dec 12 to Feb 25, BTC went from $7900 to $10300 and back to $8600. Despite buying BTC almost at all pump levels, the massive dip today has still kept me in 2-4% profit.
Bitdroplet allows you to invest minimum One USDT everyday, week or month into BTC. Let us dive deeper into the platform to know the good, the bad and the ugly of Bitbns’s new product.
Buying BTC at regular intervals on Bitdroplet
Systematic investment plan (SIP) or Cost Averaging is a strategy in which an investor places a fixed amount into a given investment on a regular basis. Bitdroplet’s Systematic Purchasing Plan (SPP) allows you to make that investment in Bitcoin (BTC) with USDT.
Anyone can sign up on Bitdroplet or use their Bitbns exchange credentials to sign in directly. For new users, KYC isn’t mandatory until the total investment goes above $500.
After registering, users can “Start a goal” of investment, by selecting the amount of investment (minimum One USDT) and choose to invest that amount daily, weekly, or monthly.
Users have to give a name to the goal or pick one, and optionally, set a target. I recommend setting a target. You will know what percentage of that target is achieved at any given point of time.
After the goal is setup, users need to deposit USDT into the wallet. Obviously, it is recommended to deposit enough to keep running the investment for about a week. Users are sent reminders three days before their investment amount will be over to deposit more.
So if your goal is to invest $10 everyday in BTC, you can buy 150 USDT and deposit it, so the investment goes on for 15 days and then deposit more one or two days before the balance is depleted.
Once a goal is completed, or if the user wants to close it, they can redeem the amount. Investment redeemed is settled in USDT at market price. The USDT can then be either transferred to Bitbns exchange to be withdrawn or traded. If you’re Indian, you can use the USDT P2P engine to withdraw it as INR as well.
Now that we know how to start investing, here is what is good and what needs improvement.
The Good about Bitdroplet
Bitdroplet offers a great way to invest in bitcoin at short intervals so the price of BTC doesn’t affect an investor. One can keep buying the dip everyday.
The interface is definitely very easy to use. The Purple colour looks good and in line with the other products like Bitbns and Buyhatke. It appears familiar for existing users.
Platform is for everyone in the world, and KYC is not mandatory up to $500. Users can also withdraw the USDT without KYC albeit there is a catch. The USDT should be transferred to Bitbns exchange first. A withdrawal is placed from the exchange later.
The Issues that can be Fixed easily
The default withdrawal of USDT happens using the Bitbns P2P engine, for which KYC is mandatory as USDT will be sold for INR. There are two problems with this. A novice user would not know they have an option to transfer to Bitbns and withdraw or a user has to complete KYC against their will.
The settlement of BTC happens in USDT only. Which means, you cannot withdraw the BTC purchased at all. It has to be redeemed as USDT. Then you can either send the USDT to Bitbns and trade/withdraw, or sell USDT for INR.
This can actually be by design, as the moto is to increase wealth by investing in BTC not storing BTC. But it’d be nice to be able to withdraw the purchased BTC.
Long Term Custody can be Ugly
The only issue I see with the system is that Bitdroplet is a custodial service. They are offering a great way to invest in Bitcoin but at the same time holding the funds hostage.
If users are investing $300 a month, in 5 months that will be $1500, an amount that should be held in safer places like a private wallet. I am not saying Bitbns isn’t a safe exchange, but at the end of the day, they are vulnerable like any other exchange.
One might argue to have shorter goals and withdraw the funds periodically, but Bitbns regularly brings offers that give a free 12th month investment, if a user invests in Bitcoin regularly for 11 months using Bitdroplet. These offers can compel a user to keep the funds in the exchange which isn’t the best way to secure the funds.
Tribute to a past hero
Not many people know this, but before Bitdroplet, or my personal blog on making an SIP to invest in Crypto, there was one exchange that allowed that. Between 2016-2018, Unocoin offered users the facility to deposit INR in their accounts and then purchase BTC everyday for a fixed amount.
Bitdroplet made a better tool that can be borderless and crypto-to-crypto.
The final Bitdroplet Review
Bitdroplet is a fantastic tool to experiment with systematic investments in a risky asset like Bitcoin. I definitely feel it is a good try. However, there is a concern of the service being custodial, so I really hope they find a solution to that.
At the end of the day, they run a business and to have as much user funds on their exchange as they possibly can, would be their goal. So the least they can do is periodically assure users how they are storing the long term investor funds to keep it secure.
You can get One USDT free on Bitdroplet, if you sign up using this link.
Let us know what is your feeling about the Bitdroplet, and if we missed out anything in the comments below.
Disclaimer: The product links used in the article are affiliate links.
Original Cover Image by Nattanan Kanchanaprat from Pixabay
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