What's better to buy every month: S&P 500 or BTC?

in #shares2 years ago

One of the simplest investment strategies that millions of people use is to spend 10-20% of their wage every month to buy US ETFs, such as SPY. If you do it every month for years, and the market keeps growing in the long term, you'll make a good profit. Keep in mind that the US stock market has been growing for the past 200 years: there have been huge crises and even crashes, of course, but a new ATH is always on the horizon.

Right now, S&P 500 is trading 20% below the ATH, and investors keep buying what they see as a cheap asset. They don't care if a new rally happens this year. Moreover, for a long-term investor, it's better that the new ATH takes longer to arrive: the more protracted the correction, the more monthly buys (such as $1000 worth of the index every month) the investor will make.

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What could break this trend? The third world war, for instance — but if it were to happen, a stock index crash would be the least of our problems.

Let's now look at Bitcoin. A lot of people stick to the same strategy, spending a fixed amount on BTC every month regardless of the price. But now many are starting to have doubts: will Bitcoin ever break the ATH? If it doesn't happen or if an investor isn't sure that it will happen, the monthly buying strategy isn't that attractive anymore.

Here's the important thing, however. There are millions of investors out there who are 100% sure that Bitcoin will have a new ATH again and again. And since they believe this, they will keep buying Bitcoin. Moreover, in terms of the risk/reward ratio BTC is now far more attractive than S&P 500, because a new ATH on Bitcoin would mean a profit of above 100% compared to the current price, while S&P 500 would give you only 20%.

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