The first cryptocurrency i.e. Bitcoin has skyrocketed and since been the topic of discussion among almost everyone. But Bitcoin is not alone in the race, there are other 800+ more currencies which have their own prowess. Some are good at maintaining stability, transaction speed while some are based on whole different fundamentals.
Nevertheless, all cryptocurrencies are dependent on one another as fundamentally they are the same i.e cryptos. but the effect might be both positive or negative. Cryptos may be linked in either way as their may be positive correlation and negative correlation between them. In other words value of one crypto may be directly or indirectly proportional to each other.
While it might seem safe to invest in Bitcoins, you may seriously miss out some great opportunities due to ignorance or any other reason. I personally believe in diversifying investments and this really paid me in form of lower risk and good returns. For instance, about a week ago I sold some of my bitcoins and invested the amount in Litcoins and some other currencies. Since then, Bitcoin rose form around $15,000 to $18,000 while Litecoin rose from $110 to $243 which made my investment to more than DOUBLE within a week.
While it is just an example, something happened when Bitcoin Hardfork Segwit2x was cancelled. Suddenly, bitcoin prices started to fall and Bitcoin cash started to rise drastically making my invest in the Bitcoincash 5 TIMES within Two-Three days.
While it is not always the best strategy but since you can not predict the market and due to high volatility, it is better to diversify your investments and lower the risk. Today, even if bitcoin comes down to zero, I will still have other coins and I am in huge profit from what I initially invested.
Resteem the post to spread awareness about importance of diversification.
Thanks for reading.
I am fully invested in Bitcoin right now and still growing it.
Planning to buy some altcoins next year.
Possibly, you just have seen Bitcoins grow, but as the prices go up, the risk is getting bigger and it is always smart to minimize the risk.
I agree.
Will start getting my investment out next month and just let my earnings compound.