The falling prices in bitcoin show the advantages of diversifying.
Tony had a diversified portfolio where he focused on every altcoin but bitcoin. He had a keen interest in trading but had always heard about diversifying.
John, on the other hand, was too confident on bitcoins and invested all his money on it.
Do you probably want to know what happened next?
By the mid of this year, Tony saw bitcoins going from $3000 to $12000 while regretting his decision. When bitcoin finally reached the heights Tony finally made up his mind to give up on all altcoins and go with his friend John.
Some of you might have guessed what happens next. The price of Bitcoin again starts to decrease. Both John and Tony suffered the loss.
Last couple of days we have seen the price of BTC going down. This is the reason why many people are losing hope in it.
But if we look closely is it the same if you had diversified?
You would probably say that the price of all altcoins are also falling just like bitcoins looking at the chart by coin market cap.
But if we closely look at the charts this chart is based on the comparison with USD.
Now if we compare it with bitcoin
The prices are actually going up. We cannot say that the prices are going up but compared to bitcoin the altcoins are not facing the same kind of loss.
Probably this is the right time when we can say that focusing on other coins is also important and not just bitcoins.
But on what to keep in mind while diversifying your portfolio?
This is the major question that most of the new investors have in mind when they start investing. Much to your relief Libertypool Blockchain Index (LPX) helps you out.
It helps in diversifying your portfolio by choosing the best coins in the market at the time and weights your portfolio accordingly. LPX uses CCi30 which is known to give the most accurate portrait of the market.
To know more go to libertypool.com and to be an early investor.