Diversifying Your Portfolio in Crypto

[VuSpark]

All you hear about these Trading and Investing rules that " Dont put all your eggs in one basket " or " Diversify your portfolio "

But how we Apply these rules in Crypto Market.

When Bitcoin moves 95% alts dumped. BTC moves up or down, Alts goes down. where we invest and no one can predict the market movement.


So what would be the right strategy of Diversifying Crypto Portfolio...

[1715482411]

1715482411

[Poker Player]

All you hear about these Trading and Investing rules that " Dont put all your eggs in one basket " or " Diversify your portfolio "

We also hear:

“Diversification is protection against ignorance,”

or:

Diversification is selling the winners to buy the losers.

But how we Apply these rules in Crypto Market.

So what would be the right strategy of Diversifying Crypto Portfolio...

Buying only Bitcoin or at least 90% Bitcoin.

When Bitcoin moves 95% alts dumped. BTC moves up or down, Alts goes down. where we invest and no one can predict the market movement.

That is why it is better to invest than to play roulette (a.k.a. trading).

[VuSpark]

All you hear about these Trading and Investing rules that " Dont put all your eggs in one basket " or " Diversify your portfolio "

We also hear:

“Diversification is protection against ignorance,”

or:

Diversification is selling the winners to buy the losers.

But how we Apply these rules in Crypto Market.

So what would be the right strategy of Diversifying Crypto Portfolio...

Buying only Bitcoin or at least 90% Bitcoin.

When Bitcoin moves 95% alts dumped. BTC moves up or down, Alts goes down. where we invest and no one can predict the market movement.

That is why it is better to invest than to play roulette (a.k.a. trading).

Thank you for this Helpful advice.

Some Youtuber or crypto Analyst says. put your money in different coins, memes, Exchange coins, Metaverse and gaming coins, DeFI coins etc
What is the Psychology behind that advices.

[Poker Player]

Thank you for this Helpful advice.

Some Youtuber or crypto Analyst says. put your money in different coins, memes, Exchange coins, Metaverse and gaming coins, DeFI coins etc
What is the Psychology behind that advices.

I don't know about the psychology, but as I said before, diversifying is about reducing risk, but reducing the potential return as well.

In classical investment theory, one must diversify to avoid losing everything. If you put your money in shares of a single company, there is a very high risk that you will lose it all, even if the company is a good one. However, if you divide your investments among several stocks, properties, commodities, etc. you reduce the risk a lot.

In the crypto world this seems silly to me, as all alts have been proven time and time again to lose against Bitcoin in the long run. The only more or less solid contender is shitEthereum. There are many fancy alts that promise they are going to be the next Bitcoin but just as quickly go up as they go down.

I would recommend you diversify but into other assets. If buying crypto buy Bitcoin, and if anything a bit of Eth or some other you trust (lol) and if you want to diversify more, buy stocks, mutual funds, RE or commodities.

[dimonstration]

All you hear about these Trading and Investing rules that " Dont put all your eggs in one basket " or " Diversify your portfolio "

But how we Apply these rules in Crypto Market.

When Bitcoin moves 95% alts dumped. BTC moves up or down, Alts goes down. where we invest and no one can predict the market movement.


So what would be the right strategy of Diversifying Crypto Portfolio...

Not all altcoins is dependent on Bitcoin price movement. Some of them are in opposite trend to Bitcoin during dump, It depends on how the community of the project support and value the project. Most of the supporter of coin usually consists of just traders that's why it was weak everytime Bitcoin showing a strong selling pressure.

Diversify portfolio is good but don't do it on a bearish market because it will just hurt you badly. Diversify when the market starts to recover. When market is in bloodbath its much better to change asset to stablecoins.

[so98nn]

Don’t create the fuzz of alts and it’s dependent nature on bitcoin. Simply consider every coin as different one and then invest. It would be seriously damaging if you gonna predict the future of altcoin based on bitcoin data itself. I mean what do you know about the altcoin? That project might be booming this year, there might be bigger developments as compared to the previous year or even month which may bring good economic conditions to that project. It may just show different % movement in the coming days. That’s why you should not create portfolio based on bitcoin movement’s at all.

[palle11]

So what would be the right strategy of Diversifying Crypto Portfolio...

Diversification is good because if done at the right time, in due time you get the benefit. The way to invest and diversify is when there is bear season. Buying low is the best time to diversify and wait to sell high. There are speculation that after bitcoin bull , the bull for altcoins will come so maybe investing this time to sell immediately the altcoins begin or waiting for next year bear to buy and hodl for the next bitcoin halving.

[OmegaStarScream]

Yes, you shouldn't put all your eggs into one basket, but that doesn't mean that you should put them into random coins.

Meme coins are not the way to go unless you like to gamble. Exchanges coins are also not something I would recommend, they're way too centralized and all it would take for these coins to crash is for the exchange to have some issues with the regulators.

Sure, the markets can be volatile and difficult to predict but you should always follow the fundamentals and not the hype, if you're only looking for short-term profits, then this may not be for you.

[BitcoinAccepted]

Not all coins dumps there are still some coins that was left going up along with the Bitcoin the reason why you shouldn't put it all along in one basket is that if the not all coins dumps at the same time and some are still going up. It's good for your fund so it will not be easily lose a position that was just my personal opinion and I choose to diversify my portfolio rather than staying on one cryptocurrency.

[Accardo]

Keep building your portfolio and know the exact time to sell a specific coin. The cryptocurrency market cannot be predicted so, I cannot state exactly what coin will make it to the top or to $15 from 5 cents. So watch the market and read more of white papers. this practice will guide you about different projects. listen to your instinct only. When you are told not to put all your eggs in one basket do not ignore the advice because the volatility of cryptocurrency is unpredictable. If you have let's say 2k to invest watch the coins that have pumped and stayed for quite sometimes before going bearish, check the interval at which it took for the coin to go back to it's previous ATH.

Because, I remember a specific coin Nano that made it to $15 when bitcoin was at 50k early this year, but fell back to $5 when bitcoin slacked back to 29k but after the wave of bitcoin to 59k again the coin remained and was dangling at $5 - $6 which was not a good sign. Altcoins cannot be predicted like bitcoin, but it is better to spread your net of baits (funds) to the river of cryptocurrency. they is no way the fish (profits) won't get to you. Good luck

[Wexnident]

Still, it doesn't mean that you shouldn't diversify your portfolio. There would still be instances where a coin would go up (or down) regardless of what Bitcoin does after all. Plus assuming what you said always happens, then wouldn't it be the same if you invested in Bitcoin or diversified it? It'd go down nonetheless since as you said, it follows Bitcoin. Find some coins that you think could go premium, those coins would go up naturally even if it went down due to following Bitcoin, you'd still profit in the end imo.

[michellee]

Maybe you can diversify your portfolio when the bear market comes to have so many options of coins to buy. But that will be okay if you want to diversify your portfolio now because you can see many coins will have a chance to increase higher in the next altcoins season or bull market. But unfortunately, that can make us confused to select the coins that can increase as many coins already hit the highest price.

When bitcoin is down, you can buy bitcoin but you can give your attention to buying altcoin but you need to look at how deep the altcoin price will go down because sometimes, the altcoin price can go down too deep. So  I am sure you will have your own strategy for diversifying your crypto portfolio.

[Etranger]

I disagree that portfolio diversification is generally good advice. Sometimes it works, but for me there are much more important rules. From my trading experience, I would single out 3 main tips.

1. Buy only when there is complete confidence that the asset will rise to the price that you set for yourself as a sale target.
2. Don't set yourself too long-term goals. It is better to retern into cash and wait for the next convenient position than to be frozen in the asset for an indefinite period.
3. Follow a pre-planned strategy and do not change it when you have already opened a trade.

If you follow these rules, then you can not scatter eggs in different baskets, but make money on shorter periods on successful coins.

[Luzin]

I disagree that portfolio diversification is generally good advice. Sometimes it works, but for me there are much more important rules. From my trading experience, I would single out 3 main tips.

1. Buy only when there is complete confidence that the asset will rise to the price that you set for yourself as a sale target.
2. Don't set yourself too long-term goals. It is better to retern into cash and wait for the next convenient position than to be frozen in the asset for an indefinite period.
3. Follow a pre-planned strategy and do not change it when you have already opened a trade.

If you follow these rules, then you can not scatter eggs in different baskets, but make money on shorter periods on successful coins.

Even if that diversification divides assets, then that's what I do and it's still profitable for me. Your words seem easy, but they're hard to execute. Strategies can be planned but sometimes the market demands many alternative strategies to do. Sometimes that makes me dizzy. In addition, sometimes there is greedy nature that makes us often lose. Everyone has a different trading strategy, maybe your strategy is like that. There are several different people and it adapts to what they think is most profitable.

[rhomelmabini]

When Bitcoin moves 95% alts dumped. BTC moves up or down, Alts goes down. where we invest and no one can predict the market movement.

The more reason for you to have more BTC compare to alts when you want to diversify your own portfolio. I guess have 70% Bitcoin and most of the alts would compose only 30% of the overall portfolio. Bitcoin should be the utmost important since it's the most liquid asset in the market.

[hugeblack]

The concept of diversifying the investment portfolio is called portfolios that do not move together or are not linked to each other, and therefore most of the prices of all cryptos are closely related to Bitcoin, and therefore investing in a thousand crypto and in one , the two the same which is placing eggs in one basket.

The best thing is to keep the cash and try to distribute the investments to achieve a different gain, but we cannot consider it a diversification.

[passwordnow]

Just don't diversify a lot because that can also bring you down. Invest to the top coins after you think that you're holding enough bitcoin already. We want to diversify as much as we can but in my case, it's more than 50% of my holdings are in bitcoin. While the rest, they're in altcoins including Ethereum which has the biggest part. I don't know my strategy in the near future but it changes from time to time because I also rely on the market sentiment which makes me buy more sometimes bitcoin and altcoins that are on the trend.

[Johnyz]

So what would be the right strategy of Diversifying Crypto Portfolio...

Diversify with good coins/tokens, since the last peak Bitcoin and other good altcoins was able to rise together so I think the scenario when Bitcoin pumps and altcoins will dump are just part of the history and now we are in a new era when the pumps happen, good projects will also ride with it. Always know how to diversify because its too risky to just invest on one option even if its Bitcoin, don’t miss the chance to make more money here in the market.

[Mahanton]

All you hear about these Trading and Investing rules that " Dont put all your eggs in one basket " or " Diversify your portfolio "

But how we Apply these rules in Crypto Market.

When Bitcoin moves 95% alts dumped. BTC moves up or down, Alts goes down. where we invest and no one can predict the market movement.


So what would be the right strategy of Diversifying Crypto Portfolio...

Diversifying is always been recommended specially into this market which it had been always been suggested because if you do just focus on only one and tends to dump out then theres no way for you to recover at least out of other investment you do have thats why the more the better but we know that not all would really be having the money
to invest on various coins and just ending up on investing on single point thats why we do really miss out this kind of investment method.
Even if we wanted to but we dont have funds to be used then we wont be having any choice.

[RealMalatesta]

The concept of diversifying the investment portfolio is called portfolios that do not move together or are not linked to each other, and therefore most of the prices of all cryptos are closely related to Bitcoin, and therefore investing in a thousand crypto and in one , the two the same which is placing eggs in one basket.

The best thing is to keep the cash and try to distribute the investments to achieve a different gain, but we cannot consider it a diversification.

I would not say that's the case for most of the time. Things could go up and down without the need for bitcoins existence or how that's moving. There are times when we could see bitcoin staying still and altcoins having an alt season, we have seen that multiple times so far and I agree that there is definitely a case things could go up individually as well.

I agree that most of the time when market moves then it moves all together and it doesn't move independently, but it isn't all the time, it is only most of the time. Which is why if you really want to invest into something that is not bitcoin then you should be able to do that however you want.