Miguel Leite Follow Co-founder and CEO of Coinvision. +8 years experience in tech and blockchain startups. In crypto for the tech.

8. How to Build a Balanced Crypto Portfolio Strategy

1 min read

How to Build a Balanced Crypto Portfolio Strategy - Coinvision

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Now, you have your Bitcoin, the tools and you have done your research, but as you well know by now, the crypto markets fluctuate wildly and even great projects and coins can suffer with crashes unexpectedly. To minimize your risk, the first thing to do is diversifying your investments.

1. Be smart

The golden rules of investing: never bet what you can’t afford to lose and don’t react emotionally to changes in the market. If you going to invest in the cryptocurrency market, be smart managing your risk. Never risk more than 1%-5% of your total assets.

2. Have a diversified portfolio

When it comes to value distribution the safest bet is to keep the focus on the institutionally stronger crypto coins. A well structured portfolio will have around 50% of all capital in Bitcoin; 25% in fiat to buy Bitcoin during dumps and 25% for large, medium and small caps. You can also reserve a part of your portfolio for token sales (ICOs and STOs) and leveraged trading.

3. Do your homework

Don’t make blind investments! Make sure to research the projects, the teams and their roadmap.

You can start by analysing Coinvision’s research, that gives you access to calendar updates, the people behind the project, white papers and what influencers are saying about it.

4. Pick a strategy and stick to it

This is fundamental. Once you’ve designed your crypto portfolio distribution simply maintain the proportions as you have defined them. This will ensure you buy low and sell high. For example, if your 10% investment in Ethereum triples in value, while the rest of your portfolio barely moved, the percentage of Ethereum in your portfolio will increase and you should rebalance.

This might all sound like common sense, but if you follow these steps you will already be ahead of the curve against the greater majority of market investors.

When this happens, sell part of it to rescale your assets to your original design. Then, use that profit to buy the coins that performed worst, but that you still believe in.