Dollar-Cost Averaging has been a popular strategy for hedging against volatility when buying an asset. Satoshi’s Index has come up with an interesting way to bring the strategy to the Cryptocurrency world, that appeals most to investors with little time for research.
The average investor underperforms the market, earning almost 50% less returns than the stock market.
The cryptomarket’s dizzying amount of new financial products, coins, and NFTs, challenges the average investor further. Crypto novices make plenty of mistakes, and the wide majority of them end up losing their money.
However, popular investing strategies from traditional markets are making their way to the cryptoverse. One of these is called Dollar Cost Averaging (DCA). The method, used in 401k retirement plans and other traditional investment vehicles, lowers timing risk and volatility by investing a certain amount of money regularly over a long period of time.
While the crypto industry has been adopting more investing approaches from the traditional fintech world, tools to allow investors to regularly and automatically DCA invest in diversified indexes have been lacking. Satoshi’s Index, a new NFT project that will hit the market on February 16th, has created a system to provide crypto investors with that very tool.
What is Satoshi’s Index?
According to the official website, Satoshi’s Index is the first utility NFT offering crypto investment automation. Their NFT tool invests in the most popular cryptocurrencies from their proprietary index. This index tracks the most popular coins by trading volume on a monthly basis, allowing users to diversify into a variety of coins with a DCA strategy.
Here’s How It Works
Unlike the majority of subscription model businesses where users have to pay a fee to get access to a tool, Satoshi’s Index employs the booming sector for non-fungible tokens in a rather creative way.
The way it works is relatively simple. First, the user needs to purchase one of the Satoshi Index NFTs – they work as a de-facto license to access the trading tool. Once this is done, they pair the tool with the preferred exchange – Coinbase and Binance are supported at launch – and set the amount of money they want to invest on a monthly or a weekly basis.
That’s pretty much it. From there, the tool invests into the top 10 cryptocurrencies by trading volume. The coins remain on the exchange account of the user, and the tool takes absolutely no custody of them.
Although developed as a utility NFT, the art inspiration for the project comes from the legendary blockchain investor Satoshi Nakamoto. Below is a sample of what the NFTs look like:
The collection will consist of 999 unique NFTs and will mint on February 16th, 2022. The crypto investment tool tied to the NFT will be available on Coinbase and Binance APIs at launch. The team is public, not anonymous, and available in their Discord to chat!
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