There is a lot of confusion about whether to have a diversified Crypto Portfolio or not. Many feel that to balance the profit and loss in the value of the cryptocurrency, having a diversified portfolio is a great idea. However, many have got the opposite opinion.
Many feel that having a diversified portfolio is of no use. However, on many occasions it has been proved very helpful and saved a lot of people from facing a huge loss.
So, who should go for a diversified portfolio and who shouldn’t? This decision depends a lot on the individual doing a transaction with the cryptocurrency.
Who Shouldn’t Go For a Diversified Crypto Portfolio?
The main reason for choosing a diversified portfolio is to balance the losses. There are over 1500 altcoins which are registered and trusting a single cryptocurrency is not at all suggested. People investing in the most reputed cryptocurrency Bitcoin also has other altcoins in their list.
There are many better opportunities in the market which are even more lucrative than Bitcoin. Most of the investors have got at least three cryptocurrencies. However, that may not be stated as a diversified portfolio.
If you have all kind of required expertise about the trend and market behaviour of the cryptocurrency, then you may not need to have a diversified portfolio. However, there is a still a factor of risk on trusting only one or two altcoins.
If you are starting as an amateur and want to gain some experience by investing very less capital, then also you can trust on only one or two altcoins. There is no need for a diversified portfolio.
However, for the frequent investors, having a diversified Crypto Portfolio is a common thing. They like to invest in different altcoins and have the risk factor reduced.
Advantages of a Diversified Crypto Portfolio
Investing on over or ten altcoins is a great option to spread the risk factor. Almost all the top ten altcoins have gained a growth of over 100% since the last year rate. However, it may not be the same every time. So, thus investing only in Bitcoin may result in a huge loss. How? Because, even being the top and most famous cryptocurrency, Bitcoin has got only 1,318% in 2017 whereas Ripple has experienced a growth of over 36, 018%.
So, you can easily understand how much extra people have earned by investing in Ripple in comparison to Bitcoin.
Thus, distributing your capital in a diverse option allows you to experience the advantages of growth of different altcoins.