Investing in crypto is very different in traditional stocks. Time horizon in crypto space is significantly faster than investing in stocks. A month in crypto could be a year in stocks. Blue chips coin could be replaced within a year or so. You need to have a high volatility tolerance to be in crypto than in stocks. Coins could be down 30% and up 120% within a week whereas you do not see that even in the most speculative stocks in the market.
Diversify Your Crypto Portfolio
I believe you have also diversified your own overall financial portfolio before investing into crypto. I guess at the end of the day, we’ll still have to diversify our crypto assets. Ranging from just staking or lending LP tokens on stable coins (8%-100 apr) to lucrative projects like tomb forks and nodes projects like Drip, Tomb Finance, etc (50%-500%). Here’s how I would diversify my first 10k crypto portfolio.
30% Stablecoin
The percentage of my stable coin could fluctuate. If there is a market crash or crypto winter, I’d probably use my stable coin to get other coins at a great discount. Whereas when market is bullish, I’d take profits and accumulate stable coins. Most people do not understand this theory and would do the opposite. New investors would buy when there is a hype and sell when market crashes. There is a quote where market crashes are where most millionaires are made.
My stable coins could earn a yield of 10-100% depending on how I’d like to farm it. Therefore, even when I could not earn returns on price valuation with stable coins, it is still profitable with a high apy.
20% Bitcoin
We can’t deny that Bitcoin would never go away if crypto is here to stay. Afterall, Bitcoin was the one who started everything. If people were to know about crypto, they would know Bitcoin first. Therefore, this is the reason why I would still chuck some in Bitcoin for long term wealth accumulation.
40% Altcoins in Matic, Fantom, Luna, Dot, CRO etc
I would usually dive deep and research the team and project fundamentals for good altcoins before investing in it. We know that Ethereum is still the kind of alts. However, in the recent years, many up and coming alts are getting larger chunks of the market. With the affordable gas fees and transaction speed other alts could offer, it wouldn’t be surprise that Ethereum’s market share would be threaten in the near future.
10% New Crypto Farming Coins
Small percentage of it would go to projects like the Nodes, Rebasing DAOs, Tomb Forks, etc. These project would usually be very high risk and experimental stage where it would either do very well or fall off. These projects could be Drip, Strongblock, Olympus, Hector, Tomb Finance, etc. Projects that are built on the different chains that I’m invested into.
Just remember that staking & LP tokens could be use interchangeably with defi for better returns.
Take Profits, Hold Stables, DCA The Dip & Repeat
I feel that in crypto, it’s good to minimally know how to swing trade (e.g. take profits every few months) by swapping to stable coin when it dips and breaks the support line. Accumulate and getting yield from stable coins when market is bullish, then buy back and DCA in when market is on sale. I feel that all these are kind of stuff that's easier said than done. Sometimes investing would fxxk our minds up if we aren't sure of our long term strategy.
When getting bags on projects and coins you’ve conviction in, You need to really understand the fundamentals and the team of the project you invested. So much conviction that even when you see a -70% loss in your portfolio, you’ll still hodl it. You need to believe it'll eventually moon so that it's an investment that you're willing to DCA in when it dips. Personally, I feel that bitcoin is just to accumulate long term wealth. For growth potential, I’d rather hold good alt coins cause if bitcoin goes up, they would eventually moon too.
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Disclaimer:
All of these are merely my knowledge and not financial advice. Please do your own due diligence and have conviction before investing. The information above is based on many hours of research out of my own curiosity/interest in YouTube, Google, blogs and discord communities. Leveraging & filtering information from other crypto enthusiasts and analysts.
