SIP: You can also do SIPs in crypto. What returns can you expect? More or less than mutual funds?

Just as you can invest in mutual funds through a SIP, you can also invest in cryptocurrencies through a SIP (Systematic Investment Plan). A crypto SIP (Systematic Investment Plan) is an investment strategy that allows you to invest a fixed amount in your chosen cryptocurrency at regular, predetermined intervals (such as daily, weekly, or monthly).

It works on the principle of rupee-cost (or dollar-cost) averaging, which helps mitigate the impact of market fluctuations by purchasing at different price points over time.

How it works
Instead of making a large investment all at once and trying to "time the market," a crypto SIP automates the investment process.

You choose a cryptocurrency (such as Bitcoin or Ethereum), an investment amount (some platforms allow as little as ₹100), and a frequency (period).

The platform automatically debits funds from your wallet and purchases the selected crypto at the current market price.

When prices are low, more crypto units are purchased than your specified amount; when prices are high, fewer units are purchased. This averages out your purchase costs over the long term.

What are the benefits of SIP in crypto?
Disciplined investing: It promotes regular, consistent savings, which helps avoid emotional decisions based on market fluctuations or fear.

Reduces volatility: Rupee-cost averaging helps reduce the impact of sudden price swings in the crypto market.

Accessibility: It allows investors to start with small amounts, making crypto investing accessible to more people with limited initial capital.

Convenience: The process is automated, so you don't need to track the markets daily or manually place trades.

Long-term wealth creation: By staying invested for the long term and reinvesting earnings, you can take advantage of the potential power of compounding returns.

How much return can you expect?
Mutual funds are generally considered to provide investors with 12-15% returns over the long term. Similarly, investors can expect similar annual returns in cryptocurrency SIPs.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.