Crypto Portfolio Guide

UNDERSTANDING OF A GOOD PORTFOLIO

As we know crypto is extremely volatile which means BIG wins but also BIG losses. It's extremely important to diversify your portfolio. What does this mean? Well, we want to ensure we don't overexpose ourselves to the crypto market. What could overexposure look like? This could consist of having too much of a percentage of your portfolio in smaller market cap coins.

Generally, smaller market cap coins provide better returns on investment, but they also get biggest pullback (decrease in price) when Bitcoin decides to go through a bear phase/market - some of these smaller coins will not survive the bear market, which is why it's important to not overexpose yourself.

Diversification means exercising appropriate risk through your portfolio over multiple coins so your portfolio is risk adverse if a 'bear' market happens. This guide will go through examples of portfolios you can exercise to make great gains but also to make sure you're not overextended.

WHY BITCOIN AND ETHEREUM ARE IMPORTANT

Bitcoin and Ethereum are great and safe investments to make. They are the most well-known cryptos but are very different from each other, both are considered safe investments. Every great portfolio should have a decent percentage allocated to Bitcoin & Ethereum.

Bitcoin was originally created as an alternative to national currencies. Although many other projects have adopted the same solution, Bitcoin is considered the most well-known crypto as well as a store of value competing with Gold. Bitcoin started the idea of decentralization, for example, a means to send an asset with monetary value without the requirement of centralized bodies controlling and viewing every transaction. It brings privacy to the average person like you and me.

Ethereum is different, although it's similar in the way it holds monetary value, Ethereum is much more useful than Bitcoin in many ways. Ethereum has scaled to develop smart contracts which is essentially code running on the blockchain. For instance, NFTs are smart contracts as it has proof of owner on the Ethereum blockchain.

Both are extremely important, especially being the top two market cap cryptocurrencies. Both are likely going to grow together with years to come. As technology evolves and greater acceptance of cryptocurrency in modern society, it'll only drive the prices of these two assets upwards.

WHAT DOES A LONG TERM WELL-BALANCED PORTFOLIO LOOK LIKE?

It's a great idea to ensure 85% of your capital is planted in "safe crypto investments". We generally suggest holding at least 70% of your portfolio in Bitcoin, 15% IN Ethereum, then 25% or so in the top 25 Market Cap coins. Which ones should you pick? That's entirely up to you. There's a list available here: https://coinmarketcap.com/

Consider researching a handful of projects you choose from the top 25 market cap coins, these will consist of your "safe" investments. Ideally, we want to aim for 85% of your portfolio being safe investments. This means that your portfolio will not tank as much as it would if you aped into small-cap coins.

Now with the remaining 15% of your portfolio, we can accept a little more risk. You could aim for investing in projects with strong fundamentals which have a market cap of between $300m and $1B. This research is a lot more intensive to ensure strong fundamentals are present.

Feel free to message in the chats if you're looking for assistance with portfolio building, it can seem quite daunting at first, but we can guide you through it.

We will be post our thoughts on promising projects in the Crypto Section in the Discord but please remember it is not financial advise but just our thoughts.