Diversify your Crypto Assets

One of the most important pieces of Investing advice any prospective Trader or Investor receives is to diversify their portfolio. This serves two purposes, one is safeguarding the capital invested by the individual from being concentrated on a single asset and in extension protecting them from losing their capital investment in case the value of the Asset falls, and second, helping the individual make optimum utilization of his money and increasing the chances of profit-making. This advice holds true not only for conventional trading but also for trading in Cryptocurrencies. With several types of Cryptocurrencies in the market, any Trader has an ample number of choices under his belt to choose which Cryptocurrency he wants to invest in.

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Why the need to Diversify in Cryptocurrency Portfolio?

In the recent Cryptocurrency Bloodbath, several Investors lost their money when the values of some of the major Cryptocurrencies came down by a large margin, with Bitcoin falling down below $30,000, and the Cryptocurrency LUNA having crashed completely. Even in turbulent times like these, there have been Cryptocurrencies that have fared well, and their values have actually shot up, for example, the value of BNB Cryptocurrency, which functions as a Utility Token in the Binance Exchange managed to stay afloat, and its price evaluated by 9% in the past week, despite the instability of the market.

Diversifying one’s Cryptocurrency portfolio enables the individual to counter such market fluctuations and volatilities by ensuring that their losses incurred due to one Cryptocurrency is balanced out by the profits attained by another Cryptocurrency. Smart investing backed by thorough research and due diligence can also enable an individual to make profits for themselves at such tough times. A well-diversified portfolio reflects the overall market more accurately, further educating the individual of the market conditions, which facilitates him in rebalancing his portfolio.

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How to Diversify in Cryptocurrency Portfolio?

The first and foremost requisite to diversifying in Cryptocurrency is Research. Diversification also requires time and effort, and diversifying just for the sake of diversifying could do more harm than good. While diversifying in Cryptocurrencies, it is imperative to pay heed to Tokens that fall under three categories; High-risk, Medium-risk, and Low-risk categories, and ensure to maintain an appropriate balance when investing in each category. Low-risk Tokens may prevent you from losing money, but their returns are low thereby preventing you from making optimum utilization of your capital.

To diversify in Cryptocurrency Portfolio, choose a reliable Exchange that allows you the freedom to invest in multiple Cryptocurrencies, like CIFDAQ Crypto Exchange, which allows the consumer to invest in several Cryptocurrencies that are listed on the Exchange. Diversification is a Trader’s trump card to protect himself from the uncertainties of the Market, and also invokes faith and assurance in the Trader with respect to the safety of his Assets. Diversify in Cryptocurrency today, and be battle-ready against Market storms.