How to diversify your crypto portfolio? Look at your risk level

Daniela Di Noi
Published in
2 min readMay 5, 2021


At Coinmatic, diversification is a core tenet of our investing strategy. While cryptocurrencies don’t always behave like traditional investments, the need to diversify remains. In fact, the volatile nature of crypto investing makes diversification that much more important. Each of our cryptocurrency investors gets a balanced portfolio of Bitcoin and Altcoins that is uniquely designed for their desired level of risk.

How to diversify your crypto portfolio

Having multiple coins helps reduce the impact of one coin potentially failing while increasing the chance of realizing substantial returns with at least one coin.

Cryptocurrency portfolio diversification

To set up a diversified portfolio, you’ll need to make a simple choice: How many coins do you want in your portfolio and what is your risk profile? Higher risk strategies tend to involve heavily diversified portfolios with many coins. Lower risk strategies will involve a lower level of diversification, focusing a portfolio on only a few coins. We currently support the following diversification:

  1. Low diversification level, up to 5 coins
  2. Medium diversification level, up to 10 coins
  3. High diversification level, up to 20 coins

A higher number of different currencies means including smaller coins in terms of market cap, which generally is perceived as higher risk. We don’t provide financial advice, however considering the past and recent market and user’s behavior, a ‘low’ diversification is a common starting point.

If you just want Bitcoin, Ethereum, and Litecoin? That works. Maybe you want to try out investments in twenty different cryptocurrencies? That works too. While we recommend a low diversification level for new investors, we can help you build any sized portfolio that suits your needs.

Our team of experts will carefully select coins that represent the best investments available, based on market cap, your investment goals, and our investment strategy.