As the term 'portfolio' is also popular in the world of trading stocks. I was wondering how would you diversify your crypto portfolio?
This is not professional financial advice, but how I do it is to invest based on market cap. Half of my investment is large-cap cryptocurrencies: bitcoin and Ethereum. They are stable and less risky. 30% goes to mid-cap cryptocurrencies. These carry a higher risk but have high potential growth: Cardano, Solana, Polkadot. Small-cap cryptocurrencies fill the remaining 20%. These are purely for speculative reason. They are high risk, but if they ever pick you'll enjoy first mover advantage
@hildaw Wow, you invested a lot in cryptocurrencies, can you share some of the small-cap cryptocurrencies that you have invested on? I want to check it for myself just to gain more idea. Thank you for your advice! I really appreciated it.
@evcj_ For now I won't be able to share the small cap cryptocurrencies I've invested in. Let me direct you to r/CryptoMoonShots. It's a subreddit that discusses low market cap cryptocurrencies with a moonshot potential. Follow keenly the discussions, you'll be able to identify which small cap cryptocurrencies you can invest in
Diversification depends on your investment goals. For long term investments, your portfolio should have more stable units. Like @hildaw mentioned, go for Bitcoin and Ethereum as they are stable and your investment will remain at the same range for a long time. For short term investments, you go for volatile assets that can earn you a decent income based on their price movement.
Keep it simple: 60% in big players like BTC and ETH for stability, 25% in mid-cap like ADA or SOL for growth, and 15% in small caps for high-risk, high-reward plays. Balance is key.
I just drip-feed BTC and ETH but their prices to tend to correlate so I accept that it will take a battering now and then
