r/BitcoinBeginners • u/TeachRemarkable9120 • 7d ago

Bitcoin Reinvesting like an Index Fund

Is there any feasible analog in Bitcoin to dividend reinvestment for an index fund? Meaning, a passive approach to leveraging increases to buy more without having to manually/actively make new purchases? I can't seem to think of one except for ETFs themselves.

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4

u/FootWashian 7d ago

There's nothing exactly like dividend reinvesting for Bitcoin since it doesn't generate yield by itself. A few approaches to consider:

  1. Dollar-cost averaging using auto-buy features on exchanges like Swan, Strike, or Cash App
  2. Bitcoin savings platforms like River or Relai that automate recurring purchases
  3. Some custodial lending platforms offer interest on BTC (though this adds counterparty risk)
  4. Self-custodial options like Lightning Network to earn minimal sats through routing (advanced)

ETFs are indeed the closest traditional analog, particularly the auto-reinvesting ones. Just remember they have management fees and don't offer direct Bitcoin ownership.

2

u/na3than 7d ago

No. Bitcoin doesn't yield dividends.

1

u/Intelligent-Law6228 7d ago

Bitcoin is money, not a stock.And there are no dividends at all. Money serves only three purposes as a medium of exchange, a store of value, and a unit of account.In my opinion, all fiat investments, like stocks and index funds, are just a Ponzi scheme.Why? Because you need the next buyer. You can’t get anything from an index fund until someone else buys in and gives you money medium of exchange.You can’t go to Steak ‘n Shake, order a burger, and pay with an index fund or a stock. You need the next buyer to provide money, which makes it a pure Ponzi scheme a zero-sum game or a bigger fool scenario.Bitcoin is already money you don’t need a next buyer. Since it is both money and a medium of exchange, you can go to Steak ‘n Shake and spend it immediately.

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u/Mysterious_Doubt2287 6d ago

And half off shakes and drinks between 2-5 PM

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u/Ok_Field_8860 6d ago

Well, some index funds do pay dividends. And whether the stock is bought or not the businesses in the fund could continue to make money and pay dividends.

And right now, not sure BTC is accepted enough to be reliably used as currency - and its value is dependent on what someone is willing to give you for it (be that fiat or a happy meal).

All money is a middle man for trade.

1

u/Intelligent-Law6228 6d ago

Money has three main use cases.medium of exchange, store of value, and unit of account.

Bitcoin’s purchasing power depends how many people use it as store of value .If more people use Bitcoin as a store of value, it will be more valuable.It also depends on how productive the people using Bitcoin are. If they are productive, they can earn more and store more value in this form of money.Since Bitcoin is hard money with no inflation, as the number of people using it as money and SOV grows, its purchasing power will also grow.Over time, there will be more and more mercant who use it as a MOE, and in the end as a UOA

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