Balancing Your Crypto Portfolio

Starting your cryptocurrency trading you should, first of all, develop your strategy of trading and secondly, understand how to make up your cryptoportfolio. Considering the huge volatility and different growth rates of different coins, you should analyze the market and take the decision what level of risk you are going to take. Today I’m going to share my thoughts about how the cryptoportfolio should look like. Before starting I would like to outline four main ideas: firstly I do really trade with this kind of portfolio; secondly, this kind of portfolio I consider as medium-risk one, you might disagree with the level of risk, but I find it suitable for myself; thirdly, this kind of portfolio might help you to minimize losses in case different coins fluctuations depend on some specific reasons, in case if market is falling (what might be pretty possible), you will lose the money anyway, and, therefore, finally, don’t invest more money that you are afraid to lose.

In every portfolio, there must be, as it may be called, “basic coin”, the large coin, that you will use to buy other coins. For this role, the most optimal solution would be either Bitcoin or Ethereum. Both are present in my portfolio, but the Ethereum is the basic coin. It usually covers 40% of my portfolio. I believe in Ethereum. I believe in Ethereum much more than in other coins. The reason is that I can see the growth dynamics, and, what is even more important, I understand that it is a real project that is used for a real business problems solution, what brings other demand drivers other than speculative demand. It is expected that by the end of next year the price will reach USD 3000 making almost 300% percent growth for our investments. Not a lot compared to the 2017 growth rates, but this trend of growth rates declining is inherent to all big coins.

The next element of my portfolio is, of course, Bitcoin, But not just a Bitcoin, but a pair of Bitcoin and Bitcoin Cash, 15% each. You cannot expel the most valuable coin from your portfolio, that is obvious. But what is the reason for copying the original Bitcoin with its clone, Bitcoin Cash? I found out the interesting pattern: when Bitcoin is going down, Bitcoin Cash is growing. Coping these two currencies is a great way to leverage the huge volatility risks.

The next coin I would like to mention is Neo, the small coin not even from the TOP10 market cap coins. But the reason why cryptotraders usually include it in their portfolios is that it one of the most steadily growing currencies on the market. And I allotted the 10% of my investment money for that coin. Well, as I mentioned at the beginning, I’m looking for medium risk, so in this case, this coin suits here the best.

The next coin I would like to stress my attention on is Ripple. Although this coin has suffered both huge growth and subsequent downfall recently, I am still strongly convinced that it is going to grow in future. The reason is that Ripple has an interesting blockchain technology behind it and if some blockchain-based company is going to emerge in the long distance, this is going to be Ripple. I dedicate 10% to this coin as well, but there is a possibility that I will shift some funds from other coins to this one.

Well, there are 10% left, but I usually set these 10% free for some other coins. The most common practice for me is splitting it into 2 parts 5% each. For the whole time I’ve been investing with this portfolio structure, these to 5% share were taken by Monero, Eos, Cardano, Litecoin, Dash, IOTA, Bitcoin Gold and Ethereum Classic. This part is for short-term investing and brings a little bit of flexibility.

So, I have just shared my portfolio with you. But this is not 100% perfect portfolio, it just suits my needs the best. You should find the optimal combination for yourself and trade with the desired level of expected profitability and risks. I wish you good luck in trading! Read more here.

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