How to Build a Diversified and Profitable Cryptocurrency Portfolio

How to Build a Diversified and Profitable Cryptocurrency Portfolio

Hello, community,

Today, I will share a guide on how to build na effective cryptocurrency portfolio for both bull and bear markets. The goal is to create a flexible portfolio with high-potential assets, a solid base, na opportunity fund, and a portion for speculation. We will divide the portfolio into five categories: Solid Base, Volatile Assets, Passive Income, Cash, and Airdrops.

1. Solid Base:

   • Bitcoin and Ethereum are the chosen assets for this category. For more conservative investors, I recommend allocating all funds to Bitcoin. These are the two most established and least volatile assets, providing a secure foundation for the portfolio.

   • In a Bull Market, the solid base can represent 40% of the portfolio, split equally between Bitcoin and Ethereum, or fully in Bitcoin.

   • In a Bear Market, the allocation should be 50% to 60%, with 30% to 40% in Bitcoin and the rest in Ethereum, or 100% in Bitcoin.

2. Volatile Assets:

   • During a Bull Market, this category should represent 30% to 40% of the portfolio, while in a Bear Market, it should be reduced to 5%. Volatile assets include altcoins with market values ranging from millions to billions and can be classified as ‘alpha’ and ‘beta’ based on their size in their specific niche. For example, Render, a leading asset in the AI and DePIN sectors, would be na ‘alpha’ asset, whereas ATH, which is new to the market, would be a ‘beta’ asset. Allocation should be adjusted based on risk tolerance and objectives. For lower risk, increase allocation in ‘alpha’ assets; for higher returns, consider a greater allocation in ‘beta’ assets.

3. Passive Income:

   • In the DeFi (decentralized finance) sector, there are various ways to generate passive income, such as staking, lending, Real World Assets (RWAs), and liquidity pools. In a Bull Market, allocate about 10% to this category, and in a Bear Market, increase it to 25%. If you’re interested in learning more about passive income in DeFi, contact me on X (Twitter), and I will provide more content on the topic.

4. Cash:

   • The cash component serves as a reserve to take advantage of opportunities during market downturns, when solid assets are priced lower. In a Bull Market, allocate 5% to 10% for this purpose, and in a Bear Market, increase it to 20% to 25%.

5. Airdrops:

   • The portion for airdrop speculation should be 5% to 10% of the portfolio. In Bear Markets, this category should be disregarded, as airdrop speculation tends to be more limited.

I hope you find this content useful. Apologies for the brevity, but I will return soon with more detailed information. Follow me on X for daily updates on the cryptocurrency market and feel free to provide feedback or suggest topics for future content.

Link: https://x.com/Haruki_Cripto?t=r6dlWbOl0Sv2X4LYNoyvrA&s=09