Topic: Opinions on diversification (Read 484 times)

Well, judging by what I earlier said, I think we are still on the same page here. Some persons thinks that diversifying their investment is by investing in different alt coin. Although it could also be seen as diversifying in crypto but not in general investment. When someone decides to diversify in their general investment, it means they have invested in crypto and other real world asset like stock, bonds,  shares, real estate, etc.

The best diversification is consideration of individual risk. If an investor thinks that investing in an altcoin would keep him in a safer monetary position, then the idea is wrong. Because altcoins attract more risk diversification in the right sense is built on the idea of mitigating the level of risk. When the opposite is happening then it is not diversification anymore. Most investors always have the mindset that investing in several assets without considering the risk level is a way for diversification. Financial goals and duration of investment can also be considered when diversifying.

However, there are other forms of investment that an investor can diversify into. It must not be an alternate to Bitcoin since the risk is higher there. There is real estate, and some stock commodities that we can put our money into.

The idea of diversification is rational because it also means diversification of risk. Going all-in is always a very risky move, so it makes sense that it's better to diversify one's investments and resources, just in case this one thing doesn't work out.
That being said, it is not necessary to diversify within cryptos. I believe that Bitcoin is the safest crypto investment, so buying other coins is unlikely to decrease the risk. But, say, keeping some funds in gold, real estate, or perhaps even in fairly strong fiat on a deposit account can all help to diversify and make sure a person is not left with nothing. Just in case Bitcoin doesn't recover from another bear market one day. Or something renders it useless.

You could diversify in crypto investments by allocating maximum funds into bitcoin and a minimal amount into potential altcoins. However, since it's quite difficult to find the right altcoins most especially if we are talking about those new altcoins in the market, I suggest you just stick into bitcoin and do DCA every time you have spare money and add more bitcoin into your portfolio. The more bitcoin you buy and hold, the more massive your profits you will come to reap in the future. Of course, patience is highly a must.

But when it comes to the long term and risk management when separating with our minimal money power, it will actually interfere with your focus when in an investment.
We can see that in the end the risk of altcoins is much greater than bitcoin for the long term and I think we have to realize that the possibility is not only based on a positive thing like profit but we have to look at both sides where risks must also be considered.

So in this case disverification when it is only in the scope of crypto in my opinion is not right because in the end there is already something good enough for the long term, namely bitcoin so why impose it on altcoins whose risks are clearly greater in terms of losses. because after all when we talk about investment of course the long term is the most appropriate choice and bitcoin is the most feasible for that.

I think diversification itself or in general is good but it can only be bad or even other good things in this world can turn into bad on the wrong hands. Having a BTC first is a good thing actually before others. It was like a base of our investment due to its robustness. Altcoins are more than one so we must not generalize them and say that they are bad but some of them still have a good potential as they have unique features than in BTC.

This makes them to move on their own sometimes, so it's also a good idea to have them, so that we can still earn continuously if in case BTC is in a bad mood. No one says that we can only diversify on the same field but you are correct, it is also good to diversify on other fields as well. Again, choosing the right asset is still a must, as there are also bad and scam ones on them. 

You don't have to rely on the value of one coin to profit,  because if you have ever witnessed an Altcoin season before you would understand better that the coins you would hope on to profit the most from ,you would even will disappoint seeing then drop in value, whereas the least expected coins will even perform greatly,  therefore diversification is thus a good one as its give you and edge over your investment portfolio than just relying on one particular coin to profit,  secondly during Altcoin season, all do not rise at same time, so when you diversified, it will give you the chance to take profits and possibly move them to coins that has not yes started pumping.

Actually I don't see anything wrong with diversification of investment and we  also need to know what we are doing so that we are not going to make mistakes to have invested out funds in the wrong projects. It is quite good we have a plan and we are always doing survey or research about the next cryptocurrency projects we want to invest our in so that it is not going to affect us later after when we have made the choice and have invested our funds. Since this is also a financial decision, it is good we know what we are doing and also always planning well so that we don't have to keep regretting after every wrong decisions we have made concerning our investments strategies.

I think diversification is important in cryptocurrency because cryptocurrency is all about calculated risks. And you should not keep you all eggs in the same tray. You should diversify that and when you will see after a long time ,you will get Max profit from 10 percent investments and less profit you will from 20 percent of the investments you did. And you will get profit from 30 percent investments you did and may be or may be you will get profit from remaining part of Investment but more chances you will get no return on 40 percent of investments but if you are lucky person you can get success in all types of investments because luck is very important in every investment of life. In my opinion, cryptocurrency is best to invest.

My idea of diversification has always been to invest in some digital assets like crypto and extend too to some physical assets like real estates, gold, commodities and many others. If anyone pools all his resources to just digital assets of different classes, then I do not classify such as diversification of investments because same basket carries all of them.

As long as there is enough capital to fund the investments and there are good strategies in place to ensure that the different investments generate returns at the right time or one of the investments sustains the other investment including the investor when the other investment suffers losses, then diversification is a better option.

Exactly, diversification is highly recommended to have various assets from the portfolio and it is recommended that we have USDT stable coins to make a profit from inflation that occurs in other local currencies, USDT can also be used as investment capital to buy BTC when the market is bearish and we will have the opportunity to make more profits. high to hold btc assets in the long term.

However, apart from diversifying crypto assets, you must have other assets such as gold, property to stabilize your assets. The goal is that we don't need to exchange crypto assets if we don't need emergency funds and we can exchange gold for emergency needs and buy again when we make a profit from crypto investments.

When it comes to crypto investment, the issue of diversification being either bad or good can only be determined base on the kind of crypto a person invest into, because if a person diversified his crypto assets to just only into Bitcoin, Solana and stable coins such as USDC and USDT, then that can be regarded as a good portfolio for diversification, whereas if he invest in Bitcoin and whole lots of shitcoins and newly launched coins which has got no reputation, then such investor stands a high chance of having his funds being liquidified if he is unlucky to buy into a scam project.

So in conclusion, diversification of crypto asset is good, but what asset you diversify into is what matters most.

There's a saying that we should not put all eggs in one basket which could be risky. The decision of diversifying one's investment and still putting all your capital into different crypto is same things as having all your investment still in one basket, despite that you are investing on different altcoins.

It's not bad to actually invest in other altcoins after buying Bitcoin but one need to understand the risk in some altcoins before investing in it. Also, if you want to diversify your investment, invest in other non crypto assets.

When you have money and want to invest it, you buy independent assets so that if one dumped/crashed others don't follow.

Can you say this is true about altcoins? When the answer is no, then buying altcoins is not a diversification. It is giving the investor the false sense of diversification because whenever bitcoin makes a move, altcoins get dumped so you really aren't receiving the benefits of diversification.

You need to have a few assests.

If you can mine scrypt at a profit you should mine it and set up trade ladders with both the doge and ltc you mine.

you likely can’t mine btc at a profit so dca it.

you do not need much else which means 3 coins doge+ltc and btc.

your btc is always stack and hold.

you need cash to some degree
maybe gold
maybe silver
a few stocks
maybe real estate

Diversification is always been best and not considered to be bad, it would really be just that depending on how you would really be able to handle out such risks because not all would really be having that courage or having that dedication whether they would really be able to bare up with the risks involved or not because there are ones who do really want with those less risks and this is why it would be situational on this aspect.
Splitting up on different investment will really be that having that kind of advantage considering that you could be able to profit in different source in compared into those who do focus on a single point.
There are ones who do have that kind of courage and this is why they would really be coming up with this kind option but of course opportunity and advantage would really be there.

Somehow those people who do really love on trying out to diversify but since they dont really have the money or capital that they could be able to put in, this is why they do really missed out this kind of opportunity
on which this is something not that new. To thsoe who do have that sufficient capital or funds will really be always having that advantage. If you are someone who do have that limited then try out to compound
your profits and make your capital something more bigger and on the moment that you can diversify then this is the moment that you could be able to do it.

Only diversification? In cryptocurrencies? You consider that as a STRATEGY?

I'm all for spreading your bets, but without deep knowledge, it's not diversification, it's desperation. It's like blind darting at a board you cannot even see. You're not reducing risk, you're just diluting your potential returns

The world of cryptocurrencies is chaotic. You have to grasp the terrain, the players, the fundamental tech. You have to be able to tell serious ventures with promise from scammers and shitcoins that are only noise. Diversification without understanding is garbage. Indeed, you could be lucky for a time but finally you will burn out. And occasionally, even shitcoins can make you quite profitable

I have edited the poll to have another option for persons like you with other POV.
I just had to bring this topic here because I know that people have different opinions on this.

What the hell are you talking about, and what does it have to do with the topic at hand?


You must be young and probably don't own any other asset class other than crypto.  Even if you own a lot of bitcoin at present, you'll be headed for the poorhouse more likely than not.  Not diversifying is absolutely stupid.  Doing it the right way (with assets that don't correlate with each other) is smart.


So one coin in a sea of cryptocurrencies--and excluding stocks, bonds, precious metals, etc., is your idea of diversification?  Don't lead others astray and just please put the keyboard down.

diversification of cryptocurrency investment is the best thing someone who is into cryptocurrency should do because sometimes it helps for acceleration of profit during investment so I know very well some people who spread their investment of cryptocurrency to different coins and when they coins they invested on develop a value in the market the make a lot of profit so it not to concentrate directly on one particular coin but diversify them to different altcoins based on profit making and also experiencing of loss

I am not a fanatic of certain assets and I am a neutral person or take the middle ground in any case, including in determining an investment asset for the future or looking for profit.

Talking about diversification is of course always good, but sometimes it becomes bad depending on what coin assets we buy and how financial management is in shopping for an investment asset in crypto, just like you keep your money in bitcoin by 70% and the rest in ETH I think it's not a problem because both assets have very good fundamentals as investment assets in crypto. but I'm sure regarding the issue of diversification everything has a preference, but I believe that regarding the issue of diversification, everyone has their own preferences in determining their own assets, some crypto tools also have clear projects and are still in the development stage so I think it goes back to their respective points of view in assessing an asset in the crypto market which is relatively many types and fields as the basis for them to operate in their business.

But most importantly in the market, we must have a large stake in bitcoin, because that is far more guarantee for its future as far as I see the development of bitcoin acceptance.

No matter how profitable bitcoin or any highly potential investment, diversification is still very much important. You don’t know the future of your investment, so you need to diversify and invest not only in bitcoin or altcoins, but even to other forms of investment that are proven to give high potential returns like real estate or stocks. Although you can decide to DCA more bitcoin to increase your future profits, but come to think of it, having multiple investments will also give you multiple profits, most especially if all of them will come into fruition. Or if one fails and lose your capital, at least you still have other investments that may succeed and give you good returns.

If I had a significant amount of money, I would invest and diversify my investments in many different areas to minimize risk and have the opportunity to grow my wealth. But if I don't have a lot of money then I won't diversify and instead I'll choose an asset with the best growth potential to bet on. This will be risky but not a huge amount anyway and if my choices are right I will get a more significant return than diversifying.
Diversification is not a perfect strategy without drawbacks, so whether we decide to use it or not will depend on our personal circumstances.

Diversifying in crypto is like buying a block of flats close to Central Park and then thinking of spending a few bucks to buy some trailer park in Detroit thinking for sure price will rebounce, it can't go much lower, right!?! Diversifying is about putting your money in things that don't go up and down at the same time and are not influenced by the same things, you buy stocks in air travel, pharmaceuticals, food stuff, you don't buy all of them in oil companies, just because those are different companies it doesn't mean diversification.

Look what happens with our markets, Bitcoin goes up, everything goes up, Bitcoin comes down all alts are in red, how is diversification helping you?

That's true. Even if you diversify the amount that you have isn't a lot, you won't even feel the volatility of the assets that you have. So, for every move that the market makes, you barely feel it because you don't have a lot. And that makes sense that when the capital that we invest is quite low, returns are quite low too. We're no longer in the era where Bitcoin is too cheap and then fluctuations can be as much as it can be compared to the present time. I won't say that there's no benefit, there is still but it is not that a lot so do not expect that will little capital, an investor will be having great gain, just no.

Yeah on the contrary, I think diversification is not a bad idea even though it concerns Cryptocurrency investment, well If you ask about the best Cryptocurrency to invest on a lot of people would go for Bitcoin, they're right though cause it's actually the best in terms of long-term investment plan.

 However the fact that Bitcoin is the best for investment doesn't make it the only Cryptocurrency for investment, there's still other Alt Cryptocurrencies with good potential like Ethereum, Solana and one could even think of investing of Ton who's blockchain just recently came up but got good potential, However that's not an advice so DYOR on that.

 With that being said, i stand on the opinion that diversification is good if done correctly by investing on the right cryptocurrencies and studying the market before rushing to make investments, whether for short or long-term.

If you diversify with altcoins, this may give you better returns but will not reduce the risk of your portfolio. Because once bitcoin is dumped, you can easily see that no altcoin will be able to increase in price and that is considered a risk in diversifying with altcoins.

The real purpose of diversification is to minimize risk, not just focus on returns. So, I think it is more correct to talk about diversification that we should invest in non-crypto assets. As for our investments in bitcoin and altcoins, we are just trying to optimize returns, IMO. I also invest in altcoins but I don't consider this as diversification because the risk is even higher when investing in altcoins.

Wow. I think I have never been quoted so many times on a single post. 13 times in just less than a day, and it's not even such a controversial topic. I am glad to see many others agree diversification is pointless, if not even completely wrong. I personally think it's irresponsible to advice people to do it. Bitcoin is the diversification. Spreading it into alts is gambling. I'm not changing my mind, been here too long to see differently

Wish new posters would actually go up and read old comments or at least on page 1.

Diversification is generally a good idea with crypto assets. Investing in a variety of different cryptocurrencies can help spread the risk & potentially increase the chances of earning returns. By diversifying you can reduce the impact of any individual crypto asset's price volatility on your overall portfolio. It is important to carefully research & select a diverse range of cryptocurrencies with strong fundamentals & potential for growth. Diversification should be accompanied by proper risk management strategies to ensure a balanced & informed investment approach. Something like 50% Bitcoin, 25% Ethereum, 10% Solana & 15% random less known coins could be a good portfolio.

In terms of definition, type and method, diversification is good in my opinion if it is practiced properly. There are many types of investment that I understand. Placing money or using money to buy valuable assets is not good if it is done in just one type of investment with the aim of minimizing the potential risks contained therein.
Of course, this is related to the capital owned by the person. If you only have small capital, it is difficult to manage or practice investment diversification.
If, for example, I have small capital that is not enough to buy several valuable assets, then I will only place it in one type of asset, such as Bitcoin.

Diversification is needed in investing - the aim is to minimize risk. There is an investment piece of advice that you need to consider and that is "don't put all your eggs in one basket". If you know what it means - then you might consider that diversification of investment assets is fine as long as you choose assets that really have long-term potential.

If you only believe in bitcoin and not in any altcoin - then you can diversify into physical assets in the form of property, gold and so on. Diversify to minimize risk - that's a smart choice in investing.

I wouldn't say that diversification is totally bad or that it's even bad. Everyone has the reason for doing what they choose to and if you diversify in the right way and it works well for you, I don't think it's totally bad.

the options available for someone who wants to diversify his investment could be that you want to buy Bitcoin as your primary asset and then try out other crypto asset with a smaller amount and whatever profit that comes from the altcoin can be reinvested into Bitcoin. If it's that way, it's also good and works well for some people while others might choose to ration thier diversified investment into ratios of maybe 50% in Bitcoin, 30% in a non digital asset and the remaining 20% could go into an altcoin they feel have good prospects. These aren't bad investment strategy and if followed well they can yield good returns but you've got to be careful on the asset you're investing into outside of Bitcoin so you don't scatter your capital all away.

Diversification somehow helps to reduce the extent of your exposure to the risk associated in investing in an asset but can also serve to drain the profit you get from an asset if one asset is doing well while the rest are doing bad. For me, since I'm still at my entry level of Bitcoin accumilation, diversification isn't for me at the moment, maybe in tge future I can conaider it but till I'm a bit comfortable with my Bitcoin investments, i will rather stick to a known and trusted form of investment.

Diversification is good especially if it is done correctly by acquiring the right coin in our wallet for example if a fellow user wants to do diversification of his investment he could hold Bitcoin, ethereum or Litecoin Matic and so on. These coins are top 10 cryptocurrency but anything less than is not a diversification rather gambling because if invest in a shitcoin it could lead to serious damage where you have already created a channel for your lost and moreover you knows altcoin doesn't maintain its value for long duration of time and can be easily switch off when there seems to be dark in the market. In essence, it's good to only hold bitcoin and ethereum that is only trusted coin which you can hold for long but newly coin is like a trap to quickly lose your investment.

Honestly, just follow what the big players are doing with their portfolio, diversify big share to BTC and the rest spread across promising alts.
it's gonna be the most safest way to invest yet the profit will be high as well.

but the thing is that, diversification doesn't work if you got small amount of money, it works wonder when you have at least big enough capital to make diversification matter otherwise it'll be an overhead with no benefit whatsoever.

people will have differing opinion to this matter because people have differing capitals.
their approach toward the investment also what makes them have different opinion, some people can afford risky investment, other not.

Whether diversification is good or bad will depend on the assets we want to own. If we already have bitcoin and want to diversify with altcoins then it would be a bad idea because we all know the entire cryptocurrency market depends on bitcoin. If it has problems then the whole market has problems and diversification does not work in this case. But if we use non-crypto assets, it helps us reduce risk significantly and that is the benefit of diversification.

Not to mention, diversification will depend on the amount of capital we have, if our capital is too small, diversification will not bring any benefit.

I'm always in favor of diversification may it be on investment in general or in crypto specifically. Although I am heavily focused on Bitcoin, I also have a handful of altcoins. Even if Bitcoin is the primary crypto asset I'm after, these altcoins have important roles to play. I oftentimes move funds through altcoins. They offer a much cheaper way. Apart from that, these altcoins could also grow in their Bitcoin value every now and then. That makes my Bitcoin holdings increase as well. If you want to move funds privately, there are also altcoins best for that.

Whether we like it or not, Bitcoin doesn't have the best in everything. I hope we remain reasonable and not fanatics.

Do you always follow what other do?

OP:

1) This thread should either not be a poll, or you ought to include more than two options in it, because what you have as choices don't fit my thoughts and might not fit others' either.

2) If we're speaking strictly of investments, 'diversification' is meaningless if all you own are cryptocurrencies.  In fact, as much as I'm a fan and supporter of them, I'd never recommend that anyone invest in them and nothing else.  They don't have a long track record, and looking at their history they're probably the most volatile asset class ever, aside from tulips perhaps.  Owning 50 different coins might seem like a diversified portfolio to a lot of people, but that's still the same basket that all your eggs are in--and these are some seriously fragile eggs.

At some point, an investment can be considered gambling and that is when you are investing in newly launched altcoins with little to no information about it. You are already gambling and risking losing all your money. Ofcourse, there will always be risks in investment but investing blindly is just straight up a gamble.

With this said, I think over-diversification is the problem here. Many investors invest on too many altcoins even those of no value. I try to incorporate the quality over quantity mindset.

I see no issue with investing only on bitcoin however if you really want to maximize profits, find at least 2 or 3 altcoins to invest in and make money for a shorter period of time than bitcoin will allow you to. Too much than that and you might drown with losses.

I believe diversification is good if done right. When we read financial books and materials, we are taught to diversify our investments. But it comes to diversifying one’s crypto portfolio, you have to be extremely cautious about the altcoins you buy. No matter how experienced you’re in the crypto space, you can never be too sure about a crypto project. That is why I advise newbies to stick to only Bitcoin and not fall for the diversification trap.

I have to agree with @slaman29. I read his other replies and I agree with his opinion.

Diversification for some cases is actually not too bad I think as long as you have a good enough economic level to support what you want to do,  even though i don't do this because I only focus on bitcoin until now I will not consider it a mistake because after all it depends on each perspective and i don't want to consider what I'm doing right now by focusing on bitcoin without diversifying to be better than those who do it because everyone has their own views on this .

But on the other hand i also want to give advice because disverification is certainly not easy so if you want to be more comfortable then focus in one place just like I do with bitcoin right now because indeed in the end as long as we are sure of what we are doing then I think everything will be better than trying to verify which ends in regret .

Diversification is not a bad idea in cryptocurrency investments,  expecially for those who started cryptocurrency investments with altcoins (shitcoins),  I think Diversifying for set of people like this to have Bitcoin as investments is very important because bitcoin is better when it comes to reliability than other cryptocurrencies. But for those that are very use to bitcoin I'm not very sure if Diversifying to other cryptocurrency is really necessary because bitcoin is still better, it is better to have Bitcoin as the only investment than having 100 of shitcoins as alternative investments. If one is thinking to have other cryptocurrencies as investments it should be with money that one can really afford to lose.

I agree with Slaman because many people see diversification as holding a lot of altcoins and expect at least one or more to skyrocket and make them millionaires overnight. Due to this idea, most of them go as far as selling their Bitcoin to get some profit which they can use to diversify, which is wrong. Selling off profit from our Bitcoin holding so far is a bad idea because if by chance the purpose of doing that did not yield good results they are at a higher loss. Their fraction of Bitcoin has reduced and the profit they would have used to purchase more Bitcoin if the price later dipped has been wasted on an altcoin that is not worth it.

We often hear people say about not putting our eggs in one basket. And that means a lot and truth. There might be some exception like for Bitcoin and you chose not to diversify in other cryptos for which like the top altcoins and that's IMHO is still a correct strategy.

That's a good example for the richest people in the world. But before they're able to diversify, they have focused to only one of their trades and that's how they have made their richest by staying first to that one very business that they have. And when they're able to breathe and see some opportunities that they can take, that's when they start to diversify in various assets where they distribute their wealth.

Diversification is an important strategy for most people that want to grow their wealth, because the alternative is generally sticking most of your money into one asset. Most people who get rich from putting money into one asset, do it by sheer luck and don't necessarily have a proper strategy, they could just as easily lose all their money if a problem is discovered with that asset. Like buying shares in Enron, or putting all your money into a grand idea that actually turns out to be just a ponzi scheme, things can go against you. If you diversify with stocks, property, precious metals, bonds and assets like cryptocurrency then you have much less chance of all of them going wrong (besides a recession which you have to be ready to accept) as they are in quite different categories.

If you're into any business or investment and have enough experience in doing this over time, you will understand the need for diversification, let's just take a look on the world richest millionaires, they have more than one thing in which they do that source in their money for them, they don't depend on one single entity because they realize on the risk that may involve if the single source have some challenges, instead they diversify in other to maintain their sustainability and increase profitability.

Let's say you got 1 million worth of liquid assets then holding them entirely in crypto or just in Bitcoin is risky, so you should diversify the 1 million into different assets with different risk factors so even if one blows the remaining will save your capital. I am not much of a guy recommend diversify into the cryptos alone, the wild shot will be 10 to 30% of your total crypto portfolio can be taken chance with altcoins but most of them should go into the Bitcoin cause it's proven, less risky compared to altcoins.

Before talking about diversification it will be good to know the kind of investment you wish to diversify into because we all know that crypto investments are very risky such that if you are not observant enough you can run into series of losses or if you don't study the coin that you want to invest on you can end up losing everything within a twinkle of an eye but there are also investments that are even riskier than crypto investments but it is good to diversify on other assets and not just focus all your energy on cryptocurrency but had it been you were specific about the cryptocurrency you are talking about it would have given us an edge to know if it is worth moving out from to invest on other things but if it is about Bitcoin, I would advise that anyone that is hodling Bitcoin and wants to diversify into other projects to forget about diversification and focus more on Bitcoin for long term profits so far as you have a good source of income that comes regularly, you can HODL Bitcoin and become extremely rich in the future.
          I know some people will be suggesting about not putting all one's hope in one thing but not putting one's hope on something depends on how good and promising that asset is because you can even chose to diversify into other things and run into losses when you could have just maintained the asset you have at hand. I believe no one holds gold and decides to diversify into other things so it is for Bitcoin.

Investment diversification is an important economic skill that everyone should have. This is because every business has a certain amount of risks associated with it and it will not be good to put all your eggs in one basket. It is also good to spread your investment to different sectors to enable you to get diverse income streams. Like you said if you diversify your investments correctly, you will benefit from them this is why doing your research before investing is very essential. Don't rely on hearsay or speculations, do your research. After Bitcoin, I have so much interest in real estate and agribusiness.

I am not knowledgeable about altcoins, so I avoid them. Maybe I might decide to invest in them later when I have gained sufficient knowledge. For now, I invest in only Bitcoin because I have basic knowledge about the Bitcoinspace. However, based on speculations or hearsay, investing in altcoins is very profitable but risky.

It is good when done correctly.

For a Bitcoin maximalist, after taking profits then that's the time that he should look for some other investments that will continue to make money.

There is nothing wrong with remaining invested in Bitcoin only. But, there's also nothing wrong if someone is diversifying. We all have different tolerances for risks and techniques when investing.

So, whichever works for you, might not work for the others.

Diversification in itself is a risk management strategy. And every business man knows not to put all their eggs in one basket. You want to have something to fall back on when the all the chips are down. I am of the opinion that diversification is good when done correctly. And by correctly, I mean, you must know what you have and what you want out of your crypto investment before you go ahead. Otherswise, do not diversify without the right knowledge and tools. However, if you diversify into shitcoins and a rug pull happens, you would wish you just invested in only bitcoin even if the market crashed.

It depends on your perspective, capital and seriousness.
I've seen some people say that “don't put all your eggs in one basket” which I guess means that we can't put everything in one aspect or one choice and that can be true. But for me personally especially in investing in crypto then indeed the choice remains only 1 only because after all everything has considerations and I also have that where I realize that my financial condition is very minimal besides that I still feel that when saying about diversification it can be done if indeed we have better finances and it's also not about some crypto assets because I feel that for crypto I will only stay in bitcoin but if I have more money I might do diversification but not in altcoins but in some other investment assets such as gold or maybe real estate so that's what I can call diversification.
But it goes back to each one's perspective and I don't mean to assume other people are wrong and I'm right because of this view of mine.

 

I might be one of those who think that diversification is a good step if done correctly, of course. Because I also diversify in other things. Including investments outside crypto. But I understand that for the long term it is more advisable to invest in crypto only in bitcoin. But in the medium term I think there are many choices we can take even from several altcoins. So diversification here can be done. Of course, there are risks that we must also be prepared to accept. But everything must be done carefully and based on long analysis and not just based on mere speculation.

It's just that this method can only be done if we really have large enough capital to invest in crypto. So it would be a big risk if it was only stored in one basket. but if the capital used is only small capital then I personally probably won't use this diversification.

Diversification of investment is good, you can't just put all your money on one investment and expect a miracle to happen overnight been it crypto or non crypto investment, you really need diversification but how you diversify depend on how much you have to put on those funds, remember that basically how much you put on investment is how you will make back the profits no matter the number on X it makes and you can't just put little money and expect miracle of 1000%.

What the other guy doesn't understand is that he might probably have not really seen where it's possible to make 1000x back then on real altcoins, there were times people were making such return during the ICO times, during the exchange IEOs and also during the IDO but now it's seems memes are the only thing doing such magic and I  not advice anyone to try such investments, they are too risky to do.

If diversification is widely accepted among investors, not just in the cryptoindustry but also in the traditional stock market, then it probably shouldn't be abandoned out of hand.

I've always believed that everything is good if it's done well. It's the same with diversification. If done correctly, it will do more good than harm.

If you invest all your money in shitcoins to diversify, then in this case, what good can happen? Nothing.

Diversification, like investing in general, should be smart and carefully considered.

If capital permits then diversification would really be always best. Why? you could really be able to have that kind of recovery on the time or moment that the other investment had gone down
then you could really be having such recovery on which this is the benefit or one of the main thing that gives out advantage into those who do make out some diverisfication but of course
it would really be that depending into your financial capacity since not all would really be having such capacity when it comes to capital or simply they dont have the funds on doing so even if they wanted to.

Also, you should really be looking up too into the probability in terms about the risks involved because of the time that you will really be tending to deal up with different options
then you would really be needing to deal up with different level of risks considering that you will really be investing into different projects or coins. So it will really be just
that totally depending on where you do put your money on.

He's correct.


The purpose of diversification is to prevent you to lost all of your money.

Bitcoin, Ethereum, XRP, Solana, BNB etc are volatile cryptocurrency, so if there's something happened to cryptocurrency, all of your investment will go down.

But, if you diversify your money to stocks, real estate, gold etc, even Bitcoin in bear season, it doesn't make stocks, real estate, gold etc will follow Bitcoin.

I am of the opinion that diversification is actually good if done the right way. And as such I would say I agree with Slaman29 opinion. If you read through is statement he didn’t meant that diversification generally isn’t bad but buying Altcoins and referring to it as diversification is not. If you read your own explanation when quoting the member you will get that Altcoins buying is pure gamble.

Let’s look at it this way, do you think Altcoins can survive if bitcoin falls today? I don’t think so because a little dump or raise of bitcoin is always followed by Altcoins, with bitcoin you’re almost sure of profits which is not the case with Altcoins, but a collapse of bitcoin will surely means a collapse of the entire market, so why not just take the less risk of investing into bitcoin only.

Diversification is actually a way to cutting your losses and not necessarily maximizing profits, that’s why if you invest into bitcoin a proper diversification will be outside cryptocurrency entirely, such that the two assets aren’t mutually dependent on each other.

Also their is no reason not to buy Altcoins but it is not diversification but rather you are looking for a way to maximize your profit which is risky, you can do that but don’t treat it as investment nor diversification means.

A recent conversation between me and @slaman29 on a topic in this forum(read here) showed me that we hold different opinions on the topic of diversification of investments. What is your opinion on the diversification of crypto investments?

Are you of the opinion that diversification is totally bad? or
The opinion that diversification is good if done correctly?