Diversifying your portfolio to reduce the effects of crypto volatility

[susan8929 811]

I agree with you, my friend, it is important to diversify the portfolio to guard against the volatility of cryptocurrencies.
Personally, I'm staying with Bitcoin to invest, but with respect to the other cryptocurrencies, it's fundamental to choose different projects. For example, Ethereum and suddenly another similar crypto, like Cardano. Litecoin, which does not depend much on the price of ETH. Suddenly a private currency, but it is more risky because of the regulations. Also a great idea are the currencies that are focused on facilitating transactions.
In conclusion, it is better to invest in different cryptocurrencies that are focused on different areas so as not to depend on the price of just one.

[Goyaa 2414]

I think indeed we should expand our portfolio in trading, not just one crypto but several cryptos. But generally altcoins are affected by bitcoin price so you should be careful when buying crypto. You have to manage the risk so that there is no loss, buy potential coins as a trade.

[Virgil dijk 1431]

Like people will always say "do not put all your eggs in one basket". That saying can also be applied to cryptocurrencies putting all Investment in a coin isn't a good idea because anything can happen, there might be a drastic fall in a coin while other coin might be rising at same time, so this more reason our portfolio needs to be divided and be invested in different coins .

[Raqeebzy 6456]

On 10/16/2020 at 6:10 PM, zhoutong said:

I have to agree that investors can't put all their eggs in one basket. This will create a bad effect of all the eggs break when the basket falls. So this basket we discuss here is the crypto market and the eggs are cryptocurrencies. When market goes down all the eggs break. 

I am trying to get the perfect picture of how diversifying portfolio of investment saves from loss due to volatility. No doubt it is the best practice to avoid all eggs in a single basket but you can still face loss due to volatility depending on the currencies invested on. 

Diversifying portfolio can only effectively save from wrong investments not necessarily against volatility.

[teebasas 3018]

It is always a good idea to diversify your investment portfolio in order to maximize your chances of making a good profit. When you invest in multiple coins, one or two of them will almost certainly become successful and meet your expectations.

[hghadeer611 689]

In my opinion, it is a great idea to reduce losses, but I think it reduces profits as well.
I have read some posts from people who diversify their portfolios but I don't see this method as increasing profits.

[HumamAliDeeb 590]

Portfolio diversification is an investment strategy used to spread risk across a number of asset classes. Rebalancing your portfolio is one of the critical factors necessary in securing successful long-term investments and is very important because it reduces the chance of one negative factor affecting your entire portfolio. Trading profitably is all about winning and winning over the long term. You cannot win in the long term if you experience a sharp decline in the asset you are investing in that is enough to keep you from trading. Portfolio diversification helps avoid this negative scenario, reduces risks associated with specific asset classes, increases the chances of encountering favorable conditions and opportunities for your system and your strategy, and benefits from more signals in the market.