The most common and easiest way to diversify crypto investment is to classify and divide investment portfolios into several types of cryptocurrencies, such as for Coins, you can diversify based on market cap. As for tokens, you can group them according to their uses, such as Stablecoins, Exchange Tokens, DeFi Tokens, Meme Tokens, etc. The strategy and goal of diversifying crypto by type is to anticipate a downtrend, so you can still maintain profit margins, because your crypto investment portfolio consists of several types of crypto that have different performance.
How to Diversify Investments Based on Crypto Types
- Thread starter Suba
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- #3
I did the easiest way to diversify crypto investment portfolios based on crypto types, although there are also many ways to diversify other cryptocurrencies such as diversification based on use case (industry) or based on geography (country).
Additionally, cryptocurrency diversification is what each and every crypto investors must try because it's a way to maximize profit as well.
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- #5
Diversity investment in cryptocurrency needs to be done if you have more than 5 types of crypto. Diversity is not to optimize profits but often reduces the average profit rate, the main goal of diversification is to minimize risk, but if investors only have three types of crypto there is no need to diversify.
