What is Swan Bitcoin and how does it work?
- December 29, 2022
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When someone wants to buy Bitcoin (BTC), they usually take the route of a cryptocurrency exchange. Newbies may buy BTC on just any exchange they come across, while those with some sort of experience may opt for a reputable one. The exercise though bears little fruit as most exchanges function almost identically as centralized entities, often working as custodians of the crypto assets of the buyers.
The security factor is generally limited to passwords and 2-factor authentication (for the buyers who have opted for it). Customer support, wallet support and ease of use are other factors that buyers might consider when zeroing in on an exchange to buy Bitcoin.
Exchanges have a drawback when it comes to supporting customers who want to buy Bitcoin. With an array of digital coins on their platforms, it is simply not possible for them to focus exclusively on Bitcoin buyers. They lack Bitcoin experts who could analyze how Bitcoin should optimally feature in the portfolio of the buyer, factoring in macro factors in crypto and mainstream economy along with buyers’ own financial status.
The scenario pronounces the need for a Bitcoin-specific platform that would not only enable anyone to buy the first decentralized cryptocurrency but also provide them with expert advice and hand-holding. This is where Swan Bitcoin rolls in. As a Bitcoin-only accumulation platform, it caters to regular customers as well as high-net-worth individuals and businesses. This article will help potential investors understand what Swan Bitcoin is and how it works.
What is Swan Bitcoin
Swan Bitcoin helps one save value in Bitcoin, using the method of dollar-cost averaging to incentivize saving over spending. In return for a fee, it allows buyers to sign up for both one-time and recurring Bitcoin purchases. It doesn’t take a spread on the purchase, as well. A spread refers to the difference between the buy (offer) and sell (bid) prices of an asset.
To buy Bitcoin, all users need to do is connect their bank accounts with Prime Trust, an institutional-grade custodian working with Swan Bitcoin. The platform enables users to automate the withdrawal of funds from their bank accounts to Swan accounts and assign a Bitcoin address as well to set up a withdrawal schedule. The users may also select any amount and time period.
Using dollar-cost averaging in buying Bitcoin
Dollar-cost averaging is a strategy of investing a fixed dollar amount at predetermined regular intervals to spread out purchases and bring down the average cost of each share. The approach helps in developing a disciplined investing habit and brings down the costs.
An example will help an investor understand dollar-cost averaging better. Suppose one invests $500 every month. In a buoyant market, $500 will get fewer cryptocurrency, but when the market goes down, an investor can buy more cryptocurrency with the same amount. The strategy could pare down the average cost per coin, compared with what one would have ended up paying if they had bought all the cryptocurrency in one go when they were more expensive.
For purchasing Bitcoin, one could think of waiting for an opportune moment when the price is low. However, to time the market is practically not possible for anyone. Rather, investors could opt for daily, weekly or monthly savings to steadily transform their dollars into savings in Bitcoin.
How Swan Bitcoin works
Swan puts customers at liberty to auto-withdraw Bitcoin to its own self-custody address or places it with the platform’s institutional-grade custodian set up in their own name. They can access Bitcoin at will.
Along with the consumer-focused face, the platform also offers Swan Private for high-net-worth businesses and individuals. One could seek expert advice regarding keeping Bitcoin in custody, buy a large amount of BTC or add Bitcoin to a company balance sheet. Swan Private helps enterprises and high-net-worth individuals build generational wealth with BTC.
Swan has on-board experts with extensive experience in the Bitcoin ecosystem to assist private clients in making a customized plan for saving in BTC. Investors get to talk to a knowledgeable resource rather than a clueless customer service, where one is more likely to exchange emails with a less experienced professional.
Adviser services of Swan facilitate the integration of Bitcoin into client portfolios, including reporting and rebalancing. Reporting provides users with a detailed overview of their accounts. Portfolio rebalancing refers to the realignment of the asset components within an investment portfolio to adjust the associated risks. Rebalancing involves buying or selling Bitcoin to reach the target level of asset allocation.
Swan also brings along an open-source product suite for Bitcoin custody and usage, along with multisignature software. The members can give Bitcoin to colleagues, friends and family as well.
How Swan helps “save” in Bitcoin
Thanks to their approach to give altcoins at bay, Swan enables customers to “save” in Bitcoin rather than “trade” the cryptocurrency. Bitcoin is among the few digital assets that are regarded not to be a security but a property in United States jurisdiction for the reason that it raises no capital and has no centralized marketing organization.
The decentralized character of Bitcoin became evident in 2017, when several BTC mining companies, manufacturers of mining equipment, large exchanges and a bunch of key Bitcoin developers collaborated to alter block size of blockchain, but a globally distributed node network thwarted their plans. Bitcoin proved itself to be sufficiently decentralized and immutable in a real-world test.
With Swan, one can set up a recurring daily, weekly, or monthly purchase plan for Bitcoin. Most regulatory jurisdictions regard such a plan as saving. After purchases are made, investors can withdraw BTC manually or set up an automated withdrawal plan that transfers Bitcoin to their own wallet. They can also pause or cancel Swan plans anytime they want.
Quite contrary to the prevalent approach to cryptocurrency investments, Swan takes into account bear markets as well. Most investors buy Bitcoin in the hope that its price will be on the upswing continuously, which is simply not possible as bear markets will always be there. Taking into account the bear markets helps flatten the possible shocks when the coin is on a downward spiral.
How Swan Bitcoin reduces expenses
Acting as a sort of savings account, Swan Bitcoin automates purchasing BTC and offers users an easily accessible and frictionless way to acquire Bitcoin. For competitive fees, users can sign up for recurring Bitcoin purchases. Focusing exclusively on BTC, Swan is able to make purchasing Bitcoin effortless and bring down the costs substantially.
Swan has deployed the method of dollar-cost averaging to incentivize preventing Bitcoin overspending or selling. What Swan brings to the table is completely different from the run-of-the-mill exchanges that have to deal with an array of altcoins as well, making the process much more complex and upping the associated costs. Swan, as a Bitcoin-specific platform, is inherently designed to resolve these issues.
As a Bitcoin-only platform, Swan doesn’t have to run a node to verify altcoins, unlike an exchange, enabling it to eliminate steep hardware, bandwidth and human resource expenses and pass on the benefits to users. It is designed for long-term savings plans and users can save money on fees they would typically incur when making a string of small Bitcoin purchases.
Multi-coin platforms also have to run a huge compliance department. The presence of so many coins on a single platform complicates the security situation, which is something none of the stakeholders can afford. All these factors translate into higher trading fees. When one buys Bitcoin on an exchange, they are simply subsidizing these expenses for the exchange.
Is Swan Bitcoin safe
Bitcoin one buys via Swan lies with Prime Trust, reputed for holding billions of dollars worth of cryptocurrency. This is unlike an exchange-based purchase where Bitcoin lies directly in control of the exchange and not the user.
Moreover, Bitcoin is stored with Prime Trust under the user’s name, making the user the sole legal owner. The cryptocurrency lies in offline cold-storage wallets. For better security of the accounts, Swan uses one-time passcodes that are emailed to the user in place of username and password logins.
Even in an extreme case of Swan winding up, users will have legal control of funds stored within Prime Trust. Swan keeps minimal data of users to be compliant with regulations. It encrypts all such data with military-grade AES-256 and traffic with industry-standard TLSv1.2 encryption. Transfer of Bitcoin and fiat cannot happen without the authorization of users.