Zaif Encourages Bitcoin Average Price Investing With Direct Debits

In a first for Japanese customers, local exchange Zaif today launched a service for customers to invest in Bitcoin incrementally over time, with automated withdrawals from bank accounts.

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The service, called “Zaifcoin Reserve,” allows users to set an amount of fiat currency they would like to invest in Bitcoin each month, and have Zaif transfer from bank accounts via direct debit. It is then exchanged automatically no matter the Bitcoin price.

Customers may transfer up to 1 million JPY (about $9,170 USD) per month.

It is aimed not only at new investors, but anyone who may have an interest in trading bitcoin but has so far been put off by price volatility.

Dollar-Cost Averaging (DCA)

This method is called “dollar-cost averaging” and has long been a popular way for long-term investors to put money into any asset where the price is always moving up or down.

Rather than trying to predict exactly when Bitcoin highs and lows will occur — a difficult if not impossible task — Zaif’s set withdrawals and currency swaps happen at a specific time every month.

A disciplined and rational approach, the DCA investing strategy removes not only price risk but also emotion from the process. After a time, this means the customer has bought Bitcoin exactly at its average price over that period. This strategy has been proven effective at giving investors the best-possible price in the end.

Since the process is automated, there is no need for customers to approve the withdrawal each month. This allows people to forget they are even buying bitcoin, and accumulate a reasonably-sized stash without caring about price shifts.

Zaif in Japan

Zaif is operated by Japanese company Tech Bureau, which also develops a permissioned blockchain service called Mijin.

Now one of Japan’s largest bitcoin exchanges, Zaif announced last week that it had raised ¥720m (USD$6.5m) from local technology, venture capital and financial services companies.

There are future plans to offer services to customers worldwide.

The Zaif exchange, according to its parent company, “set record Bitcoin trading volumes” in Japan in April. It also offers trading in Monacoin, a Japanese-developed altcoin that has been popular with the local online community.

Bitcoin has overcome tremendous obstacles and a formerly-negative public opinion to fascinate both the Japanese population and government. This has resulted in a regulatory environment that encourages digital currency and other fintech startups to grow unhindered by the onerous compliance requirements of other major financial jurisdictions, such as New York State.

Do dollar-cost averaging and regular bank account debits sound like a good Bitcoin investment strategy? How likely are you to try this, if it is offered in your area?

Images courtesy of Zaif, Japanexperterna.se via Flickr.