Diversify! Diversify! Diversify! are the cries I seem to hear many times over when it comes to cryptocurrency. It seems like everyone on Steemit preaches this at one point or another and it is solid investment advice right?
Looking at the bloodbath that is the crypto market at the time of writing this one would think no, that's NOT a good idea...
Bitcoin is King Argument
You could easily argue that the price of most Altcoins mostly follow what is going on with the mighty Bitcoin. If Bitcoin is down a good percentage, then it seems most of the Altcoins are also down. When Bitcoin is up, Altcoins also mostly up. While this is not set in stone by any manner, it does seem to be a trend that I have noticed in my time in the cryptoworld.
Bitcoin certainly sets the benchmark for many things so maybe the best idea is to only buy Bitcoin? I decided to diversify the small amount of Bitcoin I transferred to my Exodus wallet recently (see my post on Exodus Wallet here), and pick up some Ethereum (ETH) and also some EOS. While you may have heard of Ethereum recently, EOS is based off the similar technology but goes a few steps further as a development platform for "Decentralized Everything" as their website says.
Still Did It Anyways
I picked up a good amount of EOS ($50.00 worth) as it was at a decent monthly low trading spot yesterday (as are many cryptos, go buy!). I bought the ETH a few days ago at around $220. Today both are DOWN! This is the point where some might panic and think "Diversifying my Cryptocurrency portfolio was NOT a good idea", and even with my small recent loss I would still cry DIVERSIFY, DIVERSIFY, DIVERSIFY!
Reasons to Diversify
The reasons I still support diversifying your portfolio are a few fold and here they go:
- I never put all my eggs in one basket. I apply this to all that I do in business, and many places in daily life (not when it comes to my girlfriend though! ha!)
- I am all about the HODL. Holding your investments always seems to be what pays off in the longer run. Many of these diversity purchases I will just sit on for a year or more.
- Diversifying also allows me to learn more about the Crypto world. As I join more sites and research more great blockchain projects.
- The Majority can't always be wrong. I have heard the "diversify your portfolio" phrase SO many times when it comes to investments. From people I trust, to strangers, to people I pay to manage money. Still a risk, but the percentage swings my way I feel.
What do you think about diversifying your portfolio of cryptocurrency? Have a story to tell, leave a comment!
'Stache it till next time!
Here are a few of my recent articles on Steemit
Introducting Myself and this Amazing Mustache to the Community
https://steemit.com/introduceyourself/@cryptostache/introducing-myself-and-this-amazing-mustache-to-the-community-cryptocurrency-and-mustaches-ftw
Bitcoin Accepted Here Since 2014, But Then What?
https://steemit.com/bitcoin/@cryptostache/bitcoin-accepted-here-since-2014-but-then-what
Make the first move; Owning my Own Keys
https://steemit.com/cryptocurrency/@cryptostache/make-the-first-move-owning-my-own-keys
Liquidating My Crappy 401k To Buy More Crypto Currency
https://steemit.com/money/@cryptostache/liquidating-my-crappy-401k-to-buy-more-crypto-currency
FOLLOW & UPVOTE for my original content!
Diversifying should lower risks, but also rewards too. But still markets are moving in the same direction so, not much an effect.
Good point, yes it does seem to maybe lower rewards as well but it also gives you more chances to catch something before it skyrockets.
I generally recommend diversifying. It's easy to end up with some s*** coins when you take this too far. I own roughly 15 currencies last I checked. I think I would like to whittle that down to maybe half that amount. Or not. I heard a balanced portfolio contains 25 currencies.
Good point, you can totally go too far in diversifying and that scares me as well. I had never head the "25 currencies for a balanced portfolio" thing, but I will look into that. It seems kinda high for crypto. Maybe 10 is a good number?
Diversifying is always a great move when it comes to cryptos.
i personally think, that even if btc crashes it will recover within 2 weeks max :)
that does seem to be the trend with BTC in the most part. I was just watching a video on Bitquence and their "one click diversification", kinda interesting stuff actually.