Cryptocurrency is more than just Bitcoin, Ethereum and Shitcoins, however that’s what a lot of newbies like to put their money in.
These can be because there’s a lot of news information about how one can invest $10 and it becomes thousands of dollars in profits.
I also thought the same, which is why I spent time looking for cheap assets to trade in hopes to make a lot of money.
Well, you can tell by this article that it’s not as easy as it seems.
It’s true that some smart investors who bought Bitcoin and ETH when it was low made good profits however if your plan is to grow your portfolio, you need to diversify into other assets
If you have tried making money in crypto with that quick mindset, most times it doesn’t go well and it leads to one seeing the investment continuously dropping in price.
The idea of diversifying your crypto holdings is simple, it’s about investing capital based into different crypto projects categories.
This is a strategy that is effective, because if you put your money into one place it increases the risk involved.
1) The first way to diversify your crypto portfolio is by Industry
I can pick one industry I like e.g DEFI and then research on different coins within that same industry or go all out by merging two or three industries together.
Depending on your capital but for these example I will use $100.
It can be $100 evenly allocated as $25 each into 4 defi coins or I put $25 into one defi coin and then I pick one coin from other sectors like ai, Play2Earn, cloud mining and nft.
To decide on which coin to choose, it’s better to choose that has a consistent upward growth and has demand in the market.
2) Another way to diversify is by price, this means buying coins that are at a certain price across different industries
I can choose to diversify my portfolio by only buying coins that are $5, this is good when the person is looking for crypto projects that are most likely to go up in price because of their market value.
During the bear market, the price of most coins fall so if the person buys at that price it’s easy to make profits as they move up
For example: one can choose to invest $20 into coins that are around $5.
3) Diversify your crypto based on Timing has to be a skill every crypto investor should be good at.
This is simply building a portfolio based on what sector people are interested in.
So, if the NFT boom comes around and people start buying nets, the investor will buy coins that have collaborations with the nfts.
A quick example is when the play 2earn industry was booming coins like TLM & GALA were profitable coins to invest in
