“Stacking Sats,” or purchasing small amounts of bitcoin over long periods of time, can pay off.
Sats, short for Satoshi, are the smallest subunit of a bitcoin, which is divisible up to eight decimal places. “Stacking Sats” has become a common term in the Bitcoin community for building your holdings by purchasing small amounts of bitcoin at a time.
Investing in bitcoin may seem daunting at times. Not only are there constant price fluctuations, but with a single bitcoin exceeding $55,000, it may seem as if you’ll never be able to build a decent-sized investment. To illustrate the power of “Stacking Sats,” I created the following infographic:
The idea is fairly simple, purchase small amounts, when you can, and slowly accumulate a decent position. Had you purchased just $5 worth of bitcoin a year ago, on March 29, 2020, when bitcoin was trading at $6,245, and continued purchasing $5 worth of bitcoin every Monday for the next year, your holdings would be 0.02030253 BTC, worth roughly $1,184, having only investing $260 over the course of a year.
Of course, over the past few months, there has been a bull run in the bitcoin market, with bitcoin reaching new all-time highs as more institutional investors have started to embrace bitcoin, and the rapid increase in value has prompted more people to consider bitcoin as an investment. This has affected the price and returns displayed in the image above.
Investing in bitcoin is a long-term endeavor and short-term price movements should not deter you from pursuing an investment, no matter how small. Many have predicted that a single bitcoin could someday be worth well over $1 million, which in turn would make a single Satoshi worth $0.01 and having stacked as many as possible worth it.
So, you don’t need hundreds or even thousands of dollars to start investing in bitcoin. By simply starting with a few bucks here and there when you have some to spare, you can start investing in bitcoin and build a decent-sized holding over time.
This is a guest post by Dion Guillaume. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.