ADN Coin Tips: How to Diversify Your Crypto Portfolio
Crypto investment involves risks. In this ADN Coin Tips blog, we provide basic info on how to diversify your crypto portfolio and earn.
Disclaimer: These are only some information we have collectively gathered from various legitimate sources. We do not give any investment advice to anyone at any time. Please do your additional research and look for experts who can guide you in this area.
Saying that the crypto world is a jungle is a sheer understatement. Statistically, there are more existing cryptocurrencies than fiat. Technically, there are so many terms and acronyms that are unique to blockchain technology. Even at ADN, we are introducing concepts that are virtually new to the ICO world.
In crypto investing, many of us have been taught to diversify our crypto portfolio to reduce risks. The idea sounds nice and noble, but if you don’t do it correctly, it’s practically bad. Basically, you will just be giving away free money on a cryptocurrency that might not even take off after its ICO. Worse, if the market goes to the bear territory, many (if not all) of your altcoins will take a free fall. That is not what you really have in mind, do you?
Diversifying your portfolio is only one step in the right direction. To take the second and third steps, you need to become diligent and to have foresight. In this blog, we provide the most insightful information we have gathered to help you succeed at diversifying your portfolio and earn profits out of cryptocurrency investments.
Tip 1: Read on the right sites
This is probably one of the most basic, yet the most neglected task for any crypto investor. Reading from various legitimate sources helps you understand the market better. For example, if you found out that a notable banking executive joins a crypto project, that might or might not affect the crypto’s price. But if the project inks a deal with a financial conglomerate, there’s a bigger possibility for its price to go up since the partnership involves a name that has been trusted through the years.
Examples of insightful sources include crypto news agencies, forums that are dedicated to crypto investing, and notable personalities who have a considerable number of followers, just to name a few.
Tip 2: Decide on how much you are willing to risk
Diversifying your portfolio means that you are not putting all your eggs in one basket. However, you can take it one notch further by appropriating your funds according to those cryptos that have a higher probability of succeeding than crashing.
There are over 2,000 cryptocurrencies listed on various crypto comparing sites like CoinMarketCap. Each of them promises to go to the moon. But not all cryptocurrencies are equal. Other mainstream cryptocurrencies like Bitcoin and Ether are relatively more stable than the others. You’ll do well to have a sizable investment in them than in those that are more speculative.
Tip 3: Don’t be an emotional trader
Crypto investing and trading involve a significant amount of risk, and those that are influenced by their emotions tend to be clouded in judgment. For example, if you invested in a cryptocurrency that has gained a 40% increase as a result of what we call a bull run, you might either hodl or sell all your cryptos because you think those are the only options. But there actually is another option wherein you can hodl and sell at the same time: sell only a percentage of your crypto.
Some experts who can read the market fluctuations very well advise to sell about 20% of your assets, then hold the rest. When the asset increases, even more, you may opt to sell about 20% of your remaining assets as well. The amount entirely depends upon you, but make sure that you will not let your emotions rule over you.
Crypto investing and trading involve a significant amount of risk, but if you do it with a sound mind, you’ll fare better than others.
Tip 4: Be humble
Always remember that regardless of how much you have earned out of crypto trading, the fact remains that the market will be smarter than you. This is simply because there are probably thousands like you who are also trying to outsmart the market. Unless you are friends with crypto whales, you can never predict how the market will behave. That is why you always need to take precautions.
Some professionals focus on crypto investments. They are found in various communities and platforms such as Reddit, Quora, Bitcointalk, and more. But before you ask for their assistance, do a thorough background check on them to make sure that they are who they claim to be. Furthermore, you may seek the assistance of crypto portfolio apps which show price fluctuations and other information which can help you gain insights on the said cryptocurrencies that you plan to invest in. When it comes to money, you can never be too careful.
As in every endeavor, knowledge is always your best friend. Whatever your reason is for stumbling across ADN Coin, we want you to know that we do not take it lightly. We value the trust that you have provided us. As our CEO Ron Lim said in an interview,
You have to trust the ones leading the project as much as [you] trust the project itself…
