3 ways to structure your Cryptocurrency portfolio

For Crypto investors, deciding which Cryptocurrencies to invest in can be a daunting task. Assuming you know how to efficiently evaluate cryptocurrencies (for details on how to do that, click here), how should you balance your portfolio between the different Cryptocurrencies that are available? You want to maximize gains, yet mitigate risk, which are generally mutually exclusive. Let us examine a few of the practices that would produce the best results for the average Cryptocurrency investor:

1. Long term holding (2–5 years)

Unless you are a professional day trader (and if you are, I am sure there are better ways to spend your time than reading about what you already know), your gains will probably be greater if you buy and hold some of the more “traditional” coins in the Crypto space for a relatively long time horrizon (between 2 and 5 years). The large fees involved in cryptocurrency transactions (almost 3% in the majority of exchanges + 2–3% of the total amount of the currency you are sending, if you are transferring cryptocurrencies between exchanges), raises the cost of just performing the transaction to almost 10% (3% to buy the coin, another 3% to sell it and the fee for transferring the currency between exchanges). That means that your profit is anything above 10% of the difference in value between the…