In order to implement my simple strategy of DCA, HOLD and Diversify I am setting up a Bitcoin savings plan. This allows me to automate the investment process, averaging the entry price while keeping it unbiased from potential market timing attempts.
Selection criteria
There are several savings plan options available. My key selection criteria are:
- Security: there have been many cases of failing financial firms where customers lost access their crypto assets. Since “Not your keys, not your coins” I prefer a self-custody solution where I have cull control and responsibility over my coins.
- Simplicity: simple is better than complex. The solution needs to be transparent and straightforward. I simply need a tool which allows me to automatically invest a defined amount on a regular basis.
- Cost: while keeping security the top priority, transaction costs need to be minimized. Every expense reduces the returns and has a big impact on the long-term investment performance.
Platform selection
Pocket and Relai both provide a self-custody solution in Switzerland which follow a three step process:
- Provide a existing or set up a new Bitcoin wallet
- Make a fiat currency bank transfer to your pocket account
- Arriving funds are instantly exchanged to Bitcoin and transferred to the Bitcoin wallet defined in the first step
While the two solutions are quite similar there are a few differences:
| Criteria / Platform | Relai | |
| Security | Self-custody | Self-custody |
| Simplicity | Account can be set up easily in a few minutes. It did work seamless on my desktop PC. No user verification needed. Very clear and straightforward website | Account set up requires the user to download a smartphone app. User verification required. Website not as clean as Pocket |
| Cost | All-in fee of 1.5%. No additional fees hidden in the exchange rate. The most current exchange rate (Kraken) is applied. Additional Bitcoin network fee is deducted from each transfer | Buy bitcoin fee of 0.9% plus a spread for Bitcoin price fluctuations. Additional Bitcoin network fee is deducted from each transfer |
Due to the edge in simplicity and clearer cost structure (even though lower, the all-in-fee for Relai is not as clear and it would be interesting to check how the cost compares in practice) I decided to start out with Pocket.
Setting up Pocket
The set-up process is super simple and can be completed in a few minutes.
Choose how you want to receive your Bitcoin. Following the security criteria I selected BitBox02 Bitcoin-only which is a high security hardware wallet which stores your funds offline. Once you need to manage your funds you connect it to your computer.
Bitcoin.org lists BitBox2 as a good solution in terms of Control, Transparency and Environment.
Filling in wallet shipment details, email address and bank account details.
Review your order. Click accept and proceed.
Done. From there you need only to set up a recurring bank transfer providing the details in the pocket invoice. I set my first recurring bank transfer for the end of the month in my online banking.
Summary
Setting up a secure, simple and cost efficient process to accumulate Bitcoin on a automated basis is not difficult. Based on the the key selection criteria of security, simplicity and cost efficiency I chose Pocket as my starting platform. After setting up my account in a few minutes I got corresponding bank details and created a recurring bank transfer order in my online banking. From there each fiat currency transfer will be immediately converted to Bitcoin and then moved to my offline hardware wallet.