You may have noticed from my previous blogs that my complete focus is to make content which will help my audience to explore and understand the crypto market much better so that they can become experienced and self dependent . So, I will keep on posting more educational blogs on Steemit related to crypto currency.
So Today, I am back with another topic on 'How to manage your crypto portfolio' which is very important for all the people who had invested in cryptocurrency or are planning to invest in it. It will help them in managing their assets so that they can keep track of their profits as well as losses.
So, without any further due lets begin!
Diversify Your Crypto Portfolio
This is a major problem faced by people who are new to this field when trading in cryptocurrencies. Many people loose their fund just because they don't know how to diversify their portfolio. What happens that they invest all their money into one or two coins which they like thinking that they can get a good return on their investment but reality is not the same. In most of the cases the coin dumps and as you have invested all your money into it, you cannot afford to sell it in loss so you have to wait for it to recover which takes about 6 months or more.
So instead of that you should diversify your portfolio by investing in almost ten coins at a time so that even if two or three coins got dumped you still have your other coins . It will keep you going as you don't have to wait for them to recover, you can just keep trading with those coins. And by diversifying your portfolio I does not mean that you should buy thirty coins, in my opinion ten coins are enough. Let us look at an example of how to diversify your portfolio so that you can understand better.
Suppose you have 1 Bitcoin (you can take any amount) for trading and you want to invest a fixed ratio of your money in many other coins. So here is the best way to do it :-
:-) Bitcoin/Ethereum ( 30%-40%)
As we all know that Bitcoin is the top cryptocurrency in the world followed by Ethereum. Both of these coins have market cap of about 141 billion dollars and 48 billion dollars respectively. According to me, you should invest 30%-40% of your money into these coins as they are very much less risky and can give you a good return in the coming time. These coins are like safe currencies which means that you don't have to worry about their price as even if their price got dumped somehow, they have the potential to recover easily even in the bearish market.
:-) Altcoins/Others (60%-70%)
Investing in good Altcoins is the best way to boost up your profits in the crypto market. Most of the altcoins are available in very cheap prices and it is easier to mine them than mining bitcoin. You can check the list of altcoins on coinmarketcap. We can sub-divide this category into many different parts such as -
Large Cap And High Volume (20%)-This category includes the top 25 crypto currencies on coinmarketcap such as Neo, Cardano, BNB and many more coins which have large market cap and high volume . They are very much less risky and are rewarding at the same time. If you want to be on a safer side you can invest more money in these types of coins. You can easily expect 2x-3x returns from these coins in the long run.
Mid Cap And Moderate Volume (20%)- This category includes coins which have medium market cap and moderate volume and are in the list of top 100 cryptocurrencies in the world. They are a little bit risky to trade but are high rewarding also at the same time. If you can take a little bit of risk and want much more profits then you can invest more money in these type of coins as per your wish. You can expect 5x-10x returns from these coins if you hold them for long term.
Small Cap And Low Volume (10%)-This category includes coins which have small market cap and low volume. They are very much risky but very much rewarding also. I will advice you not to put more than 15% of your money into these types of coins as the chances for profits are very low as compared to the above two categories. If you are lucky you can easily expect 20x-30x returns from these types of coins.
Initial Coin Offering (ICO) (5%-10%)-This category is a little bit different from others as when a coin enters into the market it helds an ICO in which funds are raised for a new cryptocurrency venture. It is a highly profitable category and very much risky also. Most of the ICOs enter in the market just to scam people and to collect their funds. So, one should be very careful with that!!
If you want to know more about ICOs , be sure to check this link out..
https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp
Others (5%-10%)-This category includes lending platforms, mining platforms and many more. It's completely your choice in which platform you want to invest your money. It can be risky and profitable both so you should do your own research completely before you decide to join that platform.
One thing you should keep in mind that
High Risk = High Reward
Low Risk = Low Reward
So that's all I have for today!
Hope you learnt something new by reading my blog!
If you have any queries or suggestions for me , be sure to use the comment section below!
Love you all!!
