Diversify and conquer

Luka Glogoški
Aug 13, 2019 · 4 min read
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High returns at high risk

Crypto has divided the public opinion like very few things before it. While some think blockchain technology is going to revolutionize every industry it touches, others think it’s rat poison squared, however the one thing that everyone can agree on is its immense volatility.

Anyone planning on entering crypto investing, should make sure they have the stomach for it, because they are guaranteed to be embarking on the wildest investment ride of their life. Very few people can handle an 80%, 85% or even 90% decline on investment before it shots up 10,000%? These types of movements, which are not at all uncommon in crypto, have kept most risk averse investors well away from these markets for many years.

On the other hand, the stories of people becoming extremely wealthy through simply buying and holding Bitcoin for a few years have captured the world’s attention and have unfortunately also resulted in some unlucky individuals losing their homes or life savings through over-investing at an inopportune time.

Stories like these went viral on both traditional and social media during the 2017 ICO mania and culminated in a $20,089 Bitcoin on 17th December 2017. After one last big push for altcoins in early 2018 it all came crashing down with many people losing fortunes due to over exposure and poor planning.

Facts vs. fiction

On the surface it seems that Bitcoin and crypto are either going to make you rich beyond belief overnight or bankrupt you even faster. The truth of course, as always, lies somewhere in between those extremes and offers an incredible opportunity for smart investors.

This is where our RialtoTrade.com platform comes in. Our teams have designed products that offer extremely attractive returns while at the same time keeping the risks in check through active management and diversification. While it won’t make you a millionaire from investing $100, it will offer you a much lower risk exposure to crypto volatility with high probability of outsized returns compared to traditional investments.

Taking a look at our flagship market making and arbitrage algorithm, we can see that it holds 12 different assets, including USD and EUR, which it uses to take advantage of the price differences on inefficient crypto markets to profit from the spread. Thanks to this diversification between crypto and fiat currencies, any exchange rate fluctuations are well hedged against, while also continuously earning new capital.

Looking at the last 6 months USD performance we can see that despite the 19.04% loss during the last 30 days, we are still up 82.43% over the 6 month period.

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This is very favorable in comparison to most top coins/tokens, which have lost closer to 30% in the last 30 days as seen in the table below.

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As seen in the first image, in the last 6 months, our algorithm has generated an 11.32% return as trading profit measured in Bitcoin, which is helping to offset the recent fall in USD valuations. On an annualized basis that is over 22% return before any exchange rate appreciation, which is something that very few traditional investments can compete against.

Over the long term, Bitcoin has only twice posted a negative 12-month performance against USD and while past performance does not guarantee future performance, the odds are statistically favorable.

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Diversify and conquer

Given the current low interest rate environment and the highly inflated prices of traditional investments like stocks, shares and real estate an argument could be made that now is a good time for even the savvy and risk averse investors to finally dip their toes into crypto investing.

RialtoTrade.com is the platform of choice for smart investors looking to diversify in order to achieve a healthy risk/reward balance. You can invest as little or as much as you like, so don’t wait and register today for your free account.

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