Crypterium Launches 1-Year Portfolio Test For Long-Term Investors
Want to invest in crypto but don’t know where to start? Follow the Crypterium Portfolio test to get started.
Starting today, we are launching a new portfolio investment experiment. Many of you are already familiar with this concept, widely spread across traditional financial markets. A group of well-diversified investments that helps generate profits while lowering risk exposure. Now, we are applying the same concept to the cryptocurrency market, resulting in a portfolio that’s potentially much more profitable.
To create our investment portfolio, we have compiled a list of the top 5 cryptocurrencies: Bitcoin, Ethereum, XRP, Litecoin and Crypterium. While this might not be evident at first sight, the assets represent different sectors in the crypto market: coins (Bitcoin, Litecoin), platform (Ethereum), cross-border bank payments (XRP), crypto-bank (Crypterium). In this particular portfolio, we won’t be adding new coins or additional funds. The money-making “magic” will be around competent rebalancing.
With traditional assets, the 50/50 method is the standard. According to this approach, when an equal volume of shares and bonds is accumulated in a portfolio, a 50/50 rebalance is performed every 6 months. This method will be at the core of our portfolio, with a few changes. The portfolio is divided into 2 parts: 50% bitcoin and 50% altcoins. The altcoins are evenly distributed, resulting in a 12.5% share each.
Bitcoin takes the leading role of our portfolio, because of its strong influence on the rest of the assets. Altcoins tend to perform positively when BTC is either growing or flat. This ratio will not change at rebalancing stages.
Another important difference from the standard 50/50 rule is the frequency of portfolio rebalancing. Each week, we will monitor the current performance of the collected portfolio and introduce changes in the structure of assets if the ratio of 50/50 deviates by 5% or more. This mechanism is designed to prevent excessive rebalancing and hold the portfolio tight against market swings. Taking into account the wild volatility of the crypto market, rebalancing the portfolio every six months could result in substantial changes to the portfolio structure and risk exposure.
To illustrate the asset distribution, here is an example of how a $10,000 portfolio would look like:
This experiment will run for a full year, after which it will be clear whether this strategy is worth implementing or not. Each week we will offer a short overview on the portfolio state, implement changes if necessary, and evaluate the performance of the coins in the portfolio.
Starting date: May 28, 2020
End date: May 29, 2021
Following this experiment will help you understand more about long-term investment on the cryptocurrency market, as well as guide you through the basic rules of professional investing.
How to participate:
- Open a Crypterium Wallet account
- Buy crypto or use your existing balance
- Distribute the funds or part of them according to the portfolio above. To do so, you can instantly exchange with the Crypterium Wallet.
- Subscribe to the Crypterium Analytics blog stay tuned of eventual rebalancing. Our analysts will assess the portfolio on a weekly basis.
- If needed, you can rebalance your portfolio straight from the Crypterium Wallet using our super-easy exchange feature.
