Dollar cost average has proven to be and will continue to be the best way for individuals to gain a bitcoin investment position personally or via a self-managed superannuation fund (SMSF). There are pros and cons to both but with the price of the digitally scarce bitcoin continuing its upward trajectory, the bitcoin SMSF option is fast becoming more popular. We’ll explore both option in more detail below.
Buy bitcoin personally – Purchasing bitcoin or a fraction of a bitcoin can be done through a number of fiat onramps in Australia with several reputable exchanges who convert Australian dollars to bitcoin or other cryptocurrencies. You don’t have to buy a whole bitcoin, it can be purchased as a fraction of a bitcoin, known as a Satoshi. This is the smallest unit of bitcoin with each bitcoin containing 100 million satoshis. Someone with a diversified portfolio might choose to allocate $100 per week to purchasing bitcoin. The consistent purchase of btc on a weekly basis is commonly referred to as the dollar cost average (DCA) approach. It allows people to de-risk the bitcoin entry position where the focus isn’t on the price of bitcoin, rather the regular accumulation of bitcoin with the long-term view to build a position size of 1 bitcoin or greater. With the bitcoin cycles enduring high volatility, DCA decreases the impact of such extreme movements in the price of bitcoin. The acquisition of 1 btc is a dream that is now held by many people and still attainable through the DCA method of investing.
Buy bitcoin with a SMSF – Buying bitcoin with a self-managed superannuation fund generally enables individuals to take a larger position size in the emerging digital asset space. Unfortunately, with the cost of living rising with the unprecedented inflation rates, most Australians have little savings or additional cash to invest in a DCA approach personally. The bitcoin SMSF option opens greater capital allocation and control when investing. People can take 1% to 100% from their traditional retail super fund and invest it across real estate, equities and digital assets. The retail superannuation funds will only ever have a small allocation in bitcoin, say 5%. However, a bitcoin self-managed superannuation fund enables an allocation that is appropriate to the individuals risk strategy, so it can be 20%, 50% or even 100% in a specific asset class. People can continue to use their quarterly superannuation guarantee (SG) contributions to purchase bitcoin in their SMSF every 3 months. The flexibility and control of a SMSF allows people to have a percentage of their SG transferred to a traditional retail super fund and a percentage transferred to their SMSF.
The table below indicates the Australian average superannuation balance. Now is a great opportunity to take control of your super with a bitcoin self-managed superannuation fund and get superior returns for a retirement lifestyle of your dreams.