Topic: . (Read 370 times)

Although it is impossible to eliminate all risks. It can be adjusted according to the individual's specific investment goals. Diversified investment portfolios and asset allocation are inseparable.

Under normal circumstances, maximizing returns also involves time frame, risk tolerance, and macroeconomic conditions.

The trends of diversified asset classes are often different. Following market conditions, a certain asset may underperform another asset class if it performs well.

I don't think it is necessary to choose different opposing categories in order to achieve diversified portfolio investment, as that may produce poor results.

Crypto investment is the future of all investment which is the reason why we have the NFT, DeFi and more to come in the future joining the crypto market but every individual need to understand the area they can fill in and the same thing goes for portfolio diversification treated on this thread and just as you said people need to be cautious when taking some actions.
I want every newbie reading this to understand that a portfolio is not easy as people think, it is not for everybody and the last time I check it was only for individuals that have adequate knowledge in portfolio management to avoid excess loss through portfolio diversification.

Every investment tip in crypto has its con and pro.

Investing into the crypto world is a very nice decision to make, but there should also be caution when taking some actions. As said by OP, the main crypto coins in the market which are Bitcoin and Etherium are the top and should be given a more percentage when investing into crypto currency. This is because they are more reliable and the market moves with the effect acting on these two assets. There are other coins out there that has good features too, that is why you'll need to make a personal research so as to have an edge /knowledge on what you are putting your money into.
Diversification is a very use method used in crypto world, the doesn't mean you sell Bitcoin to buy altcoins, it is better to sell other coins to purchase more Bitcoin, cause the value and move of Bitcoin affects the market.
Let's diversify our assets carefully and enjoy our actions later.

Diversification is a good method. If you put all your eggs in one basket, but it performs poorly, then everything will be affected. The same goes for investing in currencies. If you invest all of your funds in a currency, you have to bear all risks when there are fluctuations. If you choose a variety of investments, you can alleviate the risks at the same time. You must have a deep understanding of the content related to the cryptocurrency you are researching, and pay close attention to the vested interests such as market manipulators.

But let's take a look at the returns on those coins, in terms of BTC:

EOS - down 95% from peak
NEO - down 95% from peak
XLM - down 90% from peak
OMG - down 95% from peak
XRP - down 95% from peak
BCH - down 95% from peak
ARK - down 97% from peak
ZEC - down 98% from peak

Now, we obviously don't know exactly how much of each coin they are holding or when exactly they bought it, but in almost all scenarios buying these coins lost them money compared to buying bitcoin alone and did not reduce the risk of their portfolio compared to buying bitcoin alone. If bitcoin crashes, these altcoins will all crash even more too.

The whole point of diversifying is to reduce your risk of losing too much money if an asset you are heavily invested in crashes. When all altcoins crash together, then buying them does nothing to reduce that risk.

At no point did I suggest that anyone should put all their money in to bitcoin. What I said was that spreading the money you allocate to cryptocurrency among different coins is not diversifying your portfolio.

That article you linked agrees with what I'm saying. It says "Portfolio diversification is the process of investing your money in different asset classes". Altcoins are not a different asset class. They are all cryptocurrencies and they all follow bitcoin, so do nothing to protect your portfolio against a bitcoin bear market.

If you want to buy altcoins to chase some pump and dump profits, then by all means go ahead, but that isn't diversifying - that is gambling. Diversifying your portfolio means investing in different asset classes - stocks, bonds, commodities, real estate, etc.

Encryption portfolio diversification is the act of investing funds in different encryption projects in one or more projects. Implementing a diversification strategy can also help you achieve the best return. It is the best way to reduce risk and avoid the risks we know. Diversification can be a good foundation for providing liquidity and more income, and it can also help reduce the risk of market volatility.

I think that diversified investment in cryptocurrency will not reduce the volatility of the crypto market, nor will it provide liquidity for the currency. Most crypto assets just follow the trajectory of Bitcoin. If the price of Bitcoin rises, altcoins will generally do the same, on the contrary, the price of altcoins will fall with the fall of Bitcoin prices. Therefore, a diversified investment portfolio will not have too much impact to reduce the risk of market volatility.

BNB is not an altcoin/ It's a gambling, and if you like gambling, go to Las Vegas.

ADA and others fall into the same category, so it is better not to invest in a lot of the same category.

I mean tokens, but I added the word smart contracts to fit the content of the article.




Not all of them are in the same category, if we ignore the central nature of stablecoins, they do not take the same approach as Bitcoin.
Some coins take a different approach to Bitcoin in times of stability.

Yes, diversification isn't just all about spreading your money into altcoins after you've bought bitcoin. There is also another consideration that you must do.

Just because someone said that you have to diversify then you have to do just as he said. What if that person doesn't have bitcoin and you've got it already and you're in a better situation? sometimes there really is a need to realize and consider first the suggestion of others because you probably are in a better situation than the person that suggests you what you must do.

I'm not reading any further, this post sums it up for me, and its something I posted before
about "the current flavour". Altcoins are really temporary, they spend a time being the focus
of attention then to be replaced by a newer project.

I de-diversified my crypto portfolio about 2 years ago I think, almost everything got
liquidated back into Bitcoin.

Diversification as @o_e_l_e_o posted is in many different areas, Crypto, Property, precious metals,
stocks & bonds, Art, Cars, collectables.

Of course it's dangerous, it's extremely dangerous in fact. I didn't say that it's safe and foolproof way to make money. But compared to investing in obscure shitcoins, it's safer, because shitcoins from top-1000 and below are even more riskier and have very short lifespans and could crash to nearly zero in a few hours. Which is why I want to stress for newbies again that investing in Bitcoin is both simpler and more profitable. If you chase those stupid x100 pumpcoins, you will get broke from all the dumps, but by holding Bitcoin you will make decent gains in a few years without any effort.

My point only stands if I'm correct and it would just be speculation from both of us. ADA and BNB might be around in 5 years and might be worth something but just because a project is receiving weekly or even daily updates in the early days does not mean much that is usually what I would call the honeymoon period where the developers are really excited and they think they are going to earn a lot of money and when it comes to two years later and their coin is still worth nothing that is when they drop support and move onto the next idea.

Transparency in cryptocurrencies is very important imo and a coin that is not being transparent will never make it big. I would say transparency is a prerequisite to success in cryptocurrency and that is why the Blockchain is such a big hit among Bitcoin supporters and you can check the very last line of code of Bitcoin and what the developers are adding on a weekly basis if you wanted too.

Are BNB and ADA going to be around in 5 years time though and if they are are they going to be actively developed or worth anything? The thing with any altcoin is you do not know how good the development team is and how trustworthy the people are behind the coin and most like I would say over 95% of altcoins fail within a couple of years and its usually because of no active development or the team behind it decided to scam.

Exactly this. Go and look at any of the heavily shilled coins from the 2017 ICO craze. Or any of the heavily shilled coins from the IEO/ITO craze. Most of them are dead or dying, down >99% from their peak, little to no ongoing development, no real world use. We can already see the same happening with some of the coins from the ongoing DeFi and NFT crazes. Let's check back in a couple of years and see where we are. I guarantee 99% of these projects will be dead, and bitcoin will still be doing just fine. "Diversifying" in to these coins brings huge amount of additional risks for the 1-in-a-million chance that the shitcoin you bought randomly pumps x10. And even if it does, is it enough to offset all your losses from all the other shitcoins you bought?

Buying any altcoin does not mean diversification because they are all in the same category - cryptocurrencies. Why take the risk with a random altcoin which is far more likely to drop to zero than it is to make any real gains, when you can just stick to bitcoin. If bitcoin dies, your altcoin dies too. If your altcoin dies, bitcoin doesn't care.

With hindsight, you could have got rich by buying and selling Bitconnect at the right time. That doesn't mean it was a good coin, or has good technology behind it, or has a good team behind it, or has ongoing development, or has a real world use, or belongs anywhere near a smart portfolio. Betting on random shitcoins like these is a gamble, not an investment strategy.

although i am not a big fan of warren buffet, i agree with him on this one. if you really get what bitcoin is, i don't think you should diversify in anything else. and i am not only talking about other "cryptocurrencies", also about other "investments". imo everything else goes to zero compared to bitcoin over a long enough period of time

This is a good article, haven't clicked so fast on anything in a while XD I have been preaching diversification for a while but to no avail. Diversification is not a new tool when investing, it has always been around with the term 'Don't put all your eggs in one basket But it's also a thing that comes when an investor get's more seasoned.

Partly agreed cause I believe there are other coins and projects that worth it to invest with. Yes bitcoin is the leader but as an investor,  I think its also wise to see some opportunity aside from btc itself. Yes there are no close competitor but there are other project out there that can be worth than investing all in on btc.

I have btc and some other alts and I could say that some of my alts are much gain profit than my btc. So i dont think we could say its stupid to invest on alts, cause actual scenario and result are shown that some investment on alts are worth than btc.

Ethereum and ethereum tokens are altcoins, why did you not just mention the name of the  altcoins and tokens directly, no need to mention altcoins again because ethereum and ethereum tokens are altcoins. You can have your portfolio the way you want it but because this is public, it has to be different. You can begin like this as an example:

1. Bitcoin 70%
2. Ethereum 10%
3. BNB 10%
4. Ethereum tokens and BNB tokens 5%
5. NFTs 5%

No need for altcoins to be included again is what I am saying.

This does not mean, many of these coins increased more than bitcoin if you check the percentage of increase, but they are now falling more than bitcoin during bear run. Some people have Doge, Raven, Zilliqa and Digibyte in their portfolio and become rich by now. Altcoins are more risky but profitable during bull run.

Even that can be dangerous if we look back what coins were in the TOP 10/20 just a few years ago and where they are now.

- Litecoin used to be a Top 5 coin. It's now in the 13th place.
- Steller is slowly dropping out of the Top 20.
- Monero and EOS have already dropped out.
- I remember that NEO was in the Top 10 a few years ago. It's sitting on #41 today.
- Iota, Dash, DigiByte, Verge have it even worse.