Are you interested in securing money for the future?
Have you considered investing?
If the answers to the above questions are yes then there is another one for you.
Now, Have you ever been interested in investing in cryptocurrencies?
Cryptocurrencies are a great way to invest your money and to get high returns on it.
But just as every coin has two sides, while cryptocurrencies have been seen to give high returns but the risk involved with them are also high.
The risk involved with them is the reason why most of the people hesitate to invest in the golden asset. But what if there is a way to get the best of both worlds? Where you enjoy the high returns of the cryptos along with minimizing the risk involved in investing in a single asset.
We are now going to discuss 4 ways to prove you that diversified crypto portfolios are better than investing in a single asset.
1. Diversification increases your chances of hitting the jackpot:
When people think of diversification they mostly think of diversifying among different investment sources like mutual funds, liquid funds, gold, etc. The main motive behind doing it is to increase your chances to hit the jackpot. The motive behind diversifying among your crypto investment is the same.
You never know which coin is undervalued and when which coin may perform well. Therefore it will be smart to spread your portfolio among different crypto assets as well. For example, we saw in the past years although people mostly concentrate on BTC, LTC has been proven to perform well and even better. Very often there are other coins as well that suddenly come into everyone’s attention and the prices skyrocket.
2. Diversification reduces your chances of loss:
If the coin you invest in does not perform well at some time the chances are very less that, other coins will also perform the same way and at the same rate. Recently we saw the price of BTC falling. Most of the other coins also faced the same trend but the interesting point that came up was that the other coins didn’t have the fall as bad as BTC. Most other coins, when compared to BTC, showed a green number than a red one.
What does this show?
If you had invested in other coins as well along with just investing in BTC your loss would have been much lesser. Therefore it can be fair to say that diversification reduces the loss.
3. You get the experience of a wider technology:
Every other coin although is on blockchain but the technology behind is different. Every coin has a different mechanism of how it functions. You can look into the technology behind Ripple, BTC, and Ethereum itself. No two coins have the exact same technology and it is informative to look into and invest in the coins to learn more.
4. The risk of fraud reduces:
The risk of fraud definitely reduces when it comes to diversification. If anyone of your coins falls into any frauds recovery is very difficult. And the last thing you want to have is to lose all your investment in some faulty technology.
The chances of all your coins falling into fraud are very less unless your wallet is hacked(Whose solution is to use hard wallets). Therefore consider investing in multiple different coins to avoid the risk.
Now as you came to know about why to invest in a diversified portfolio, let's learn how you can invest in the same.
Proper research should be done prior to deciding on what to invest. But if the investment is more like a hobby than your full-time job than you would not have so much time to look at the charts the whole day. Here is where Libertypool comes into the picture.
LPX (Libertypool blockchain Index) manages your portfolio. It chooses which coin should be invested in and the amount as well. It also rebalances your portfolio every month based on the CCi30 index which is the most accurate portrait of the market.
I'd love to invite you to get early access in Libertypool Blockchain Index, a diversified Crypto portfolio to invest in the entire Blockchain market in one click.