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How to diversify your crypto investment portfolio? Bitxmi Expert Tips

crypto investment portfolio

How to diversify your crypto investment portfolio? Bitxmi Expert Tips

Financial experts of the Bitxmi cryptocurrency exchange told how the digital money market has changed in recent years, and which coins should be paid attention to when investing.

crypto investment portfolio

Recently, crypto enthusiasts around the world are wondering how 2017 is fundamentally different from 2021. In addition to such key and important differences as the emergence of regulation, the legislative framework, the adoption of cryptocurrencies by traditional financial institutions, experts note a completely different assembly of the investment portfolio.

After a huge number of scam projects, the main asset in 2017 was Bitcoin, which often occupied 90% of the portfolio. Today, the situation is fundamentally different – although BTC is still a key asset for making money, there are a large number of assets on the market that should be used to diversify your portfolio.

The coins in the portfolio should have the lowest correlation possible in our market. By the level of capitalization, all coins can be divided into three groups:

  • high – more than $ 5 billion;
  • average – $ 250 million to $ 5 billion;
  • low – less than $ 250 million

Accordingly, a more conservative portfolio: 50-60% of coins with a high level of capitalization, a more risky portfolio – little capitalized coins. Bitxmi experts adhere to a more conservative investment option, therefore they recommend keeping the share of bitcoin in the portfolio at 50%. The dominance of bitcoin still plays an important role, as it primarily speaks of its liquidity. Experts recommend monitoring this indicator and balancing your portfolio following it.

Ethereum in the investment portfolio

The next most interesting asset is ETH, which, as a percentage of its current value, shows a much higher growth dynamics than Bitcoin. There are several reasons for growth at once:

  1. Payment company Visa has announced that it will support payments in Ethereum through the USDC stablecoin. This means not only good news for USDC but for Ethereum in the first place, which pays all fees.
  2. Much of the activity in DeFi and NFT is done through Ethereum. The growth of Ethereum here can even be called insufficient simply because all the huge billion-dollar profits that artists receive are immediately sold, or transferred to fiat or stablecoins.
  3. The launch of the Ethereum 2.0 network – although today, it is not particularly useful and requires further work, but the prospects for it are stunning. We add it by 20%.

Native tokens of exchanges in the investment portfolio

Next, we add assets from the top 10 and native tokens of the exchange on which you trade to the portfolio by 20%. Here you should pay attention to several assets at once.

According to experts, the first token worth paying attention to is ADA. If the roadmap is successfully implemented, Cardano has an excellent chance of becoming a real competitor for Ethereum. They will be able to offer functionality that is lacking in the DeFi protocol on Ethereum – interoperability with other blockchains, cross-chain functionality, and the presence of an ERC20 converter.

Also on the side of Cardano is the fact that for developers working on the Ethereum platform, one of the main problems is the slowdown in the deployment of various aspects of ETH 2.0.

Secondly, this is Polkadot – another “killer” of the ether. The project aims to create a space where data from different blockchains can be processed and exchanged quickly and securely. And crucially, no system-wide updates or hard forks.

Experts recommend paying special attention to the native tokens of the exchange you trade. So, for example, the Bitxmi exchange token BXMI has grown by 700% since IEO, the profitability of the Huobi exchange HT token is estimated at 200%, and the OKEx (OKB) exchange at 300%. So in addition to the obvious benefits of using tokens (lower fees, for example), you get good returns.

Risky investments

And finally, the last 10% are the riskiest investments. Invest in such assets as “extra” money, then how much you are not afraid to lose. These assets include the famous DOGE, the value of which depends on the information noise and tweets of Elon Musk. In addition, little-known assets in which the whales of the market invest and NFT can be included in the same block.

If we are talking about risks, then here they are understandable and common for the entire market. Considering a well-balanced portfolio, even in the event of a DeFi or NFT market drawdown, there are more stable coins among the assets that will bring us profit in the long term. In addition, experts note that a slight decrease in cost is not a reason for panic, but rather an opportunity to buy before the next bull run.

During a pronounced depression and a decline in the market (crypto winter), experts recommend keeping a large share in stablecoins. During the growth phase, increase the share of bitcoin, while the share of bitcoin in the market decreases, increase the share of altcoins. Assets with a relatively low correlation and regular portfolio rebalancing will significantly reduce the risks of a fall in the total value of the portfolio.

We remind you that on the BitXmi crypto exchange, futures trading with a leverage of 125% is available. Come in and get profit now.

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Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.

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