In finance, the so-called Capital Accumulation Plans (PAC) are quite commonly used tools, and in the crypto field, they are probably even more so
They are generally called by the acronym PAC, or “accumulation plans,” while they are rarely called by their full name of capital accumulation plans.
What is a crypto accumulation plan?
By “piano di accumulo,” we mean a particular investment method that allows for an investment to be made over time, rather than with a single purchase
It is used by those who have a medium to long-term time horizon, especially if they want to invest gradually
Classic investment involves the purchase of an asset with a single transaction, through which the asset is acquired and included in the investor’s portfolio
However, when the investor does not have enough capital available to complete the purchase in a single transaction, or when they prefer not to invest all the capital at once, they can opt for an accumulation plan
Essentially, it is similar to a purchase in installments, except that it does not involve the payment of interest
Generally, the purchase is divided into weekly, monthly “installments” or with other frequencies, which allow over time to increase the quantity of assets that slowly accumulate in the investor’s portfolio
How to create a PAC
The most typical PAC is the one where the same amount is allocated every month to always purchase the same asset. Obviously, nothing prevents you from doing multiple PACs simultaneously on multiple assets
For example, you can set up a monthly PAC of $100 on Bitcoin, which means choosing a day of the month on which, every month, you purchase $100 of BTC.
Many people who do PAC prefer to rely on automatic purchasing tools, powered by their own accounts. In this way, by setting the amount to be purchased periodically, the period (week, month, or other), and date, periodic purchases are made automatically by the tool that takes the funds from the user’s account to which it is connected, provided that the funds to be withdrawn are always available
The investor can freely choose both the amount, the scheduling, and the date of the programmed purchases
The most classic crypto accumulation plan is precisely the one that involves a purchase of Bitcoin once a month, for an amount of a few hundred euros, usually at the end or beginning of the month
It is important to remember, in case it is not known to everyone, that Bitcoin is divisible into one hundred million units, called Satoshi, so it is never necessary to purchase a whole one, because you can also purchase very small fractions
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What needs to be specified, however, is that not all exchanges offer the PAC tool
Those who want to start a crypto accumulation plan must choose a platform that allows it, otherwise they will have to manage it manually purchase by purchase
Manual management of the PAC is absolutely possible, but there is a risk of forgetting some purchases, and therefore ending up buying less
Those who prefer to rely on programmable automatic tools to not miss any purchase “installment” must consider two key factors
The first, as already mentioned, is that not all exchanges provide their users with this type of tools. On the other hand, there are also platforms that are not true and proper exchanges that offer them
In the future, it will probably be the same banks where we have our current accounts that offer similar tools, especially to create PAC on Bitcoin, but for now, it is not yet so
The second factor is the degree of customization of the plan
In fact, not all the tools that allow you to schedule an automatic PAC provide all the functionalities
In addition to the basic functionality, namely the scheduling of purchases, sometimes additional features are available, which allow, for example, the addition of non-purchase thresholds or dynamic expiration dates
Is the crypto accumulation plan worth it?
First of all, it must be said that the convenience of a PAC depends on several factors, which often vary from asset to asset
For example, the convenience of a PAC on Bitcoin is very different from a hypothetical accumulation plan on minor crypto, such as memecoin
Since these are medium/long-term investments, they are not purely speculative instruments for those who do short-term trading, and this does not make them good for purely speculative investments like those in memecoin
Another key factor to consider is the change in the purchase price
In fact, if purchase prices were to rise significantly, it is advisable to consider the possibility of temporarily suspending the plan, should one expect a future decline in those same prices
Finally, it is necessary to pay close attention to where and how the assets purchased through PAC are accumulated, because if a centralized platform is used for custody, there is always the risk of losing the assets, or access to them, if the platform closes or goes bankrupt
It is therefore impossible to give an overall and always valid judgment on the convenience of PACs, because from this point of view each PAC should be analyzed on its own, and uated in light of the user’s needs, capabilities, objectives, and availability of funds, as well as based on their specific risk profile.
