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Author Topic: Diversifying volatility in Bitcoin / crypto  (Read 59 times)
npopat12
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June 20, 2018, 08:13:58 AM
 #1

Have any of you guys wanted to diversify some of your holding in Bitcoin??

I presume the volatility can be reduced from creating a portfolio with equities and bonds but just wondered what your thoughts were?
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June 20, 2018, 08:20:09 AM
 #2

If we are going in the equities and bonds then I am sure that we will need to shut the crypto investment and there wont be any benefits of crypto from there on wards. If you really want to decrease the volatility then diversify the coins and then amen the proper investment. Investing into the Top 10 coins is always think to do because they are more stable as compared to the others. Coins which receive constant trading volume everyday and which is most popular currently can be far more stable than others. We can be selective on this process and get most of the coins which are stable to reduce the problem of volatility and as well as you can get benefits of crypto currencies.
npopat12
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June 20, 2018, 08:27:17 AM
 #3

Ok sure, but the issue with the top 10 coins is that there are heavy correlations between all of them.

I wondered whether anyone had thought of diversifying their crypto holdings with less correlated assets (public equities, bonds) etc. or potentially illiquid tokens (real estate, art)?
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June 20, 2018, 08:42:43 AM
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Ok sure, but the issue with the top 10 coins is that there are heavy correlations between all of them.

I wondered whether anyone had thought of diversifying their crypto holdings with less correlated assets (public equities, bonds) etc. or potentially illiquid tokens (real estate, art)?

It's definitely true in this bear market everything is following bitcoin down and up to a T, but in healthier market conditions, most things act independently.. It wasn't until Bitcoin started on that parabolic runup and then strangle-holding alts with the forks last year that made everything start following the King.   I do think if the volatility bothers you though, maybe go for some more stable assets like you suggest.. I'd personally choose something like Real Estate if you have that level of income... appreciates overtime (usually) and reasonably stable.. you can also earn income renting the property to make money off of making money. 

I do think Crypto's volatility though is what makes it special.  I think viewing this as a hold and wait sort of portfolio management style is not capitalizing on its full potential... We're in market cycles where money tends to move around a lot but the market cap is just staying relatively the same and smart money is scalping profits and moving them out of alt coins. As wild as it was in December, almost all the gains won in the alt market were quickly stripped away if people didn't shelter quickly to BTC or shelter of the shelter to Tether.  I think the best way to play this market is to start recognizing the market cycles, participating at the top and bottom, and then move profits away to USD or accumulate BTC to help control the volatility (at least to the downside).


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June 20, 2018, 01:40:46 PM
 #5

in current market altcoins should be only consider as bitcoin price multiplier (~90% of almost every currency volumen is traded in ALT/BTC pair and only ~10% in ALT/USD).

https://bitcointalk.org/index.php?topic=4444348.msg39704417#msg39704417


Here i described it more precised.

Thats why when you split your money into altcoins you are increasing volatility of your portfolio.

Bitcoin portfolio:
When bitcoin drop 30% your portfolio drop 30%

altcoin portolio
When bitcoin drop 30% altcoins drop 50%
When bitcoin pump 30% altcoin pomp 50%
When bitcoin is stable - coins are slowly gaining or loosing





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