Most People Invest in Bitcoin the Wrong Way. Here’s What I’d Do With $1,000 Instead.

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For years, I have invested in Bitcoin (CRYPTO: BTC) by repeatedly buying it in small, scheduled purchases and then ignoring it for as long as possible. Other approaches haven’t worked for me in the past, and I know that I’m not alone.

Per a study by Morningstar in 2026, 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. Clearly, the ETF investors were doing something wrong to produce that result. So if I had $1,000 in hand today and I wanted to invest it in Bitcoin, here’s how I’d do it without underperforming.

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Volatility can work in your favor, but only if you’re inured to it

The overarching theme of my successful Bitcoin investing activities has been taking my own weaknesses out of the loop using dollar-cost averaging — executing regular purchases over time. That way, when the coin’s inevitable volatility flares up, I don’t have to do anything at all to get some upside from it.

With $1,000, I would make five separate scheduled purchases of $200 at intervals of one or two weeks, so the capital would be allocated in a maximum of two months. Aside from helping to cope with volatility, this approach is psychologically useful because it helps you to stop thinking about Bitcoin as a crypto lottery ticket that could explode in value overnight and make you rich. In the past, that explosion could well have happened, but the idea that buying a coin is a shortcut to wealth has generally served me and my portfolio rather poorly.

But there’s a downside worth knowing. According to research from Vanguard about investments made from 1976 to 2022, a lump-sum purchase was superior to spread-out purchases as much as 73.7% of the time. That doesn’t bother me at all.

In my experience, the fastest way to lose money with Bitcoin is to get scared into selling your position during volatile and unpredictable periods where it is temporarily in a downtrend. Believing that it’s a lottery ticket means being more willing to let it go and move on to the next ticket when you should be buying more while it’s cheap and resolving to hold it for years.

How long do you really need to hold Bitcoin?

Source: finance.yahoo.com