What a good crypto portfolio looks like
In today’s blog, we’re going to cover a topic I know many of you would like to get some insight on. When it comes to investing in cryptocurrency it’s always good to have a good balanced-out portfolio because of how volatile the market can become sometimes. This means in order to have a good portfolio you’re going to need a good mix of cryptocurrencies. Which I’ll dive deep into further down in the article. There are some other fundamentals as well that help with keeping a good profit-making portfolio. With that being said I think it’s time we dive into the rest of the article now.
Fundamentals
Of course, the beginnings of a great portfolio first start with knowing the fundamentals which means knowing the basics. Now some of you may already know these if you’ve been in crypto for long enough which is great but some might not be as far as you and I in knowledge so it’s always good to go over them. Even if you do know them it’s always good to go over them again and refresh them back into your mind so you never forget. Anyways getting into the fundamentals we should first go over risk management. Risk management is one of the most important fundamentals when it comes to trading cryptocurrency. This is because you don’t want to lose all your money in one trade or lose a big portion of it. Good risk management consist of having limit sells set as well as stopping losses so you don’t lose too much money while your not focused on trading. Another great risk management tip is comparing your cryptos against each other to see which ones are performing the best and are yielding you the most money.
Now if you ever have interacted with the crypto community you know the rallying cry of holders is HODL(hold long term). Well, many might disagree with that especially those who don’t have lots of money in the market or certain cryptocurrencies. Some of those who disagree might be day traders or even cycle traders. What you should know is the key to a successful crypto portfolio is doing a mix of all of these trading options. Certain cryptos you hold till it goes to the moon one example is bitcoin unless you have lots of bitcoin it’s just best to HODL it. However, coins like Ethereum are great for day trading and cycle trading. Altcoins will however out due Ethereum and the reason for that is because they hold the most potentials which makes them the best for day trading and if you pick the right ones even HODL.
Another topic that needs to be covered when it comes to fundamentals is doing research. Now it should be obvious that when it comes to investing you shouldn’t copy other traders and should do your own research. Now as obvious as it is many people still yet refuse to do their own research and just insist on copying others’ trades. If you’re going to properly invest you need to conduct your own research now it’s okay to base your information off of others but you still need to collect more from other sources to confirm your research. I don’t know how much more I can make it obvious that this is a critical skill needed for investing in crypto.
What cryptos to hold
A very important part of having a good crypto portfolio is having a well-balanced out sheet. You want to have a good mix of high risk/high reward cryptos and low risk/low reward cryptos. What a good medium risk/medium reward portfolio would look like is that it would be 50% being Bitcoin and Ethereum and the other 50% being altcoins. The other 50% that consists of altcoins should be what your day trading most of the time if you are day trading as bitcoin and Ethereum are coins best for HODLing. Now, what your altcoins holding should consist of depends on you and the amount of money you have. Personally, for me, the main altcoins I hold that take up the majority of my altcoins holding are polkadot, matic, and cardano. I would recommend you at least hold one high risk/high reward coin so that you can potentially get huge gains someday.
Staking/Lending
One of the most important factors to take into consideration when building a good crypto portfolio is getting returns on your cryptos. Now, most of the time this will happen through just holding the cryptos and having the price increase. However though during a bear run or if your crypto is getting some temporary losses you can still make money on them. This can be through staking and lending your cryptocurrencies. What staking is in simple terms is just a way for you to make interest on the cryptos you hold by locking coins up or some exchange will also offer flexible staking where you don’t have to lock your cryptos up. Then you have lending which is self-explanatory return rates vary from cryptos and lending platforms. It’s probably best for you to stake and lend out your cryptos you plan on HODLing unless you plan on using flexible staking. There are many platforms to use from exchanges to apps What I primarily use is Celsius which you can sign up for using the link below and kucoin which you can also sign up for using the link below. I use Celsius for lending and use kucoin for flexible staking and some staking options.
Kucoin: https://www.kucoin.com/ucenter/signup?rcode=rJ7YFV4
Celsius: https://celsiusnetwork.app.link/1872568d22
My Final Words
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