If you are new to the cryptocurrency sector, you may have heard the phrase “stacking sats” or that you should “stack sats” as an investment strategy.
If you’re wondering what sats are and whether it’s a good idea to stack them, then you’re in the right place, as we’re going to discuss what sats are, the idea behind stacking them, and whether it can make a big difference to your investment in Bitcoin over time. Let’s jump in.
What Are Sats?
“Sats” is short for Satoshis, which are the individual units that make up Bitcoin. Bitcoin is divisible into 8 decimal places, with the last decimal place representing a single satoshi. If someone said that they wanted 100 Sats, it would mean 0.00000100 BTC. An entire Bitcoin is 100 million Satoshis.
Why Stack Sats?
The idea behind stacking sats is that you are buying small amounts of Bitcoin over time, and adding them to your “stack”. This could mean buying $5 (or another dollar amount) of Bitcoin every day, every week, every month, or at whatever interval you’re comfortable with.
Essentially, “stacking sats” is just a phrase that means you’re investing using a dollar cost averaging (DCA) strategy, which tends to be the best way to buy into a volatile asset like Bitcoin. By doing this, you’re less likely to be affected by Bitcoin’s volatility, while also increasing your holdings over time.
Are Small Bitcoin Purchases Worth It?
Small Bitcoin purchases can certainly be worthwhile over time, but it depends on the price of Bitcoin when you start stacking sats.
If you started only when Bitcoin just hit its recent all time high, then you might assume you’d have lost money already. But, because Bitcoin’s price has been fluctuating between just below its all time high and the range between 60-70k USD, you’d be lowering your investment price and successfully increasing your stack.
If you started earlier, like in the late 2010s, then you’d be doing extremely well, as Bitcoin was under $20k USD then and it went through a cycle up and down which means you likely have a very reasonable average price for your Bitcoin purchases depending on how you stacked during that period.
If and likely when Bitcoin’s price breaks through its current all time high, then those that have been stacking sats will certainly be reaping the benefits, as their stack will be worth significantly more than what it cost them. The key with this sort of strategy, and DCA strategies in general, is consistency and commitment to the strategy.
Closing Thoughts
Though stacking sats can be thought of as a meme within the cryptocurrency community, it’s actually solid advice for those looking to invest in Bitcoin. It may be easier to tell someone to dollar cost average into it rather than telling them to stack sats, but they’re ostensibly the same thing.
Over time, stacking sats can and likely will make a fairly large difference in your portfolio both in terms of average purchase price and overall profit.
