Whether you are new to cryptocurrencies or a long term holder, diversification of your cryptocurrency portfolio is important to consider. Now, you may be attached to your Bitcoin or an altcoin that has grown significantly since your initial buy. Whatever the case is, I believe the real question you should be asking yourself is:
"Are cryptocurrencies going to revolutionise modern technology and currency?"
Not:
"Is Bitcoin/(Insert your favourite crypto) going to revolutionise modern technology and currency?"
Why is this distinction important?
The first question discerns your belief in cryptocurrencies, whilst the second specifies and restricts it to a singular cryptocurrency. What if cryptocurrencies rise significantly, but you invested in a dud? You will have missed out on an opportunity because you were either too lazy to do further research on altcoins/ICOs or you were just ignorant.
Select a few cryptocurrencies you think will be successful long term and assign a percentage of investment based on your own research and analysis. Keep an eye on smaller marketcap cryptocurrencies or ICOs that may compete with those you hold in your current portfolio. If you currently own a cryptocurrency that aims to target cloud storage and you hear of an ICO that aims to enter the cloud storage arena, investigate it. Discern the level of threat it could impose on your current portfolio and consider your gains from your portfolio or additional funding to add it into your portfolio as a safety precaution.
Diversifying may seem like a nightmare, but if you answered yes to the first question, the natural corollary is that you consider cryptocurrencies to be severely undervalued in 2017. If so, then sprinkling a small percentage into potential threats to your portfolio comes at little cost and lowers your risk of missing out on a future Top 5 crypto.
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