Investing in crypto without investing

Background

I've been talking with a bunch of folks in meatspace about crypto currencies. It ranges from folks in finance, tech and folks in neither, but heard about it from somewhere and want to find out more. I'm sure that you're all in the same position.

The questions always move straight to "Well how do I get some Bitcoin?" We talk about Coinbase and other exchanges and then the price of a single bitcoin. A lot of folks (especially those paying rent here in Silicon Valley) don't have $8k to throw at a single coin and get discouraged. Again, I'm sure you're all hearing the same.

So we talk Satoshis and a lot of folks see to be happy waiting for a dip in things like BTC and ETH and throwing a bit of cash at it. A few hundred, or a thousand or two -- as with any of us, just whatever they can afford to lose.

None of these folks are under the impression that they're going to make a fortune making this kind of investment, but turning $1000 into $2000 in a few months is a cool trick.

I had a thought for an even lower-risk way to get a few Satoshis here and there without having to fork out a bunch of cash.

An Idea

For folks that want to have a little crypto, but don't necessarily want to commit to putting cash into it, I have another idea. It's not totally risk free, but does keep risk to a minimum. I thought I'd put it out there in case it helps anyone else. The usual disclaimers apply.

1. Set yourself up for being able to by crypto. Coinbase is pretty intuitive, but there's a bunch of others that may be better or worse. Do your own research.
2. Get hold of a crypto-backed Visa/Mastercard debit card. It doesn't matter which, as long as it has low or no fees. I've got a Shift Card, which is linked direct to my Coinbase account that makes life easier, but don't take that as an endorsement.
3. At the start of the month (or whenever makes sense), transfer your monthly budget for bills to your exchange. The regular, pedestrian stuff like phone bills. Only if you can afford to cover it if things go sideways obviously.
4. At the end of the month (or whenever makes sense), pay your bills with the crypto-backed debit card.

The premise being that between when you buy crypto, and when use it to pay your bills, the currency will have hopefully increased in price. If it doesn't, you can cover the bills from elsewhere for that month and leave the crypto there to cover next month. The increase in price will mean that when you pay, you're spending fewer Satoshis and you'll have some left over. Keep them and they'll add up.

The Math

Using some completely made-up numbers, here's the math. If we assume that at the start of our billing period, we buy $250 in BTC at $5700 per BTC, and that in that same month, BTC rises 25%, here's what it would look like (bugs in my beer-soaked Python code notwithstanding):

1. USD spent on BTC: 250.000000
2. BTC price in USD: 5700.000000
3. BTC bought: 0.043860
4. BTC price rise %: 25.000000
5. BTC value in USD: 7125.000000
6. BTC left after spend: 0.010965
7. Leftover BTC in USD: 62.500000

Fame? Fortune? Hardly. But you've got some crypto already.

Things like phone, internet, electricity, gas are all things that are known quantities each month (and probably set up for autopayment from a credit card). Round the amount up to the nearest $10 amount (or whatever), and you have buffer, plus something akin to Acorns-style investment.

The Risks

There's a number of risks here, but probably fewer than if you invested in something properly. Crypto could drop instead of rising (and that has happened), Blockchain and crypto could hit zero, and it's entirely possible that that zombie apocalypse is nigh (have you been to a Walmart lately?).

In this case, there's not much in reward, but you're only risking your monthly bill budget... and probably only for a month. Obviously take care risking that. Or don't. Not my business. :)

What are the odds that you'll see the above hypothetical %25 increase? Pretty good, judging by the month-by-month for BTC:

![btc-by-month.png]()

This doesn't take into account exchange transfer fees or card fees or miner fees. If you were to look into something like this, you'd best be served by doing what you can to minimise all of those fees. After all, they're taking a cut from your wallet.

Summary

Anyway, this is just a theory based on some tools and trends I've seen. I thought it was novel enough to share. If nothing else, it seems better than some of the rewards programs peddled by a lot of credit card companies.

Thoughts?