It’s a good time to add this post on Investor Academy. Especially as a new wave of crypto bullishness is in the markets again. I am once again receiving phone calls and messages where people are asking:
- “How can I get Bitcoin?”
- “Is it too late?”
- “Which coins to buy?”
This is a sign that we’re in yet another short-term bubble within the cryptocurrency space.
I’ll cut right to the case. Do not waste your money on day trading when it comes to cryptocurrencies. There will be a lot of noise out there that this coin is the next Bitcoin or the next Ethereum, etc. Do not fall for the hype!
I’ve been writing content on cryptocurrencies since 2017 and have a very good idea of what’s going on when it comes to content and hype. I used to write articles on:
- Hacked.com (before they changed from crypto focus to another business model because the hype died down in 2019),
- CCN.com (also had to pivot from “Crypto Coin News” because the hype died down),
- and other educational content on the subject on other websites.
So it comes as no surprise that you’re finding the article you’re reading on my personal blog now.
What Does a Balanced Cryptocurrency Portfolio Look Like
There are so many cryptocurrencies in the market today. So what coins should you buy and what coins are even available?
CoinMarketCap is a great resource for checking out most cryptocurrencies and similar digital coins currently available.
Before buying any coins, consider how much of your net worth you’re willing to dedicate to cryptocurrency holdings. This should be in accordance with your Investment Policy Statement and Risk-Reward profile.
Within that decided portion in your portfolio, consider having a well-balanced buy-and-hold crypto portfolio with the main players in the game:
- Bitcoin (~30-50%) – number one market cap to this day.
- Ethereum (~10-30%) – first infrastructure for decentralized applications among many other applications.
- Cardano (~5%-10%) – infrastructre that may have a solid foundational future.
- Monero (~5%-10%) – not many heard of this coin, but it has real-world use cases, since it’s private.
And a few other speculative coins like Stellar (similar to XRP but may have more upside potential), Litecoin, etc. Of course, the above is just a suggestion and shouldn’t be used as investment advice as you want to do your own research and due diligence. Find good projects with valuable visions and a good history.
There are other coins that will pop up and some may be amazing and revolutionary. But many new coins during a time of hype are simply scams. Most famous example: Bitconnect.
The classic video on that:
How to Buy and Hold Crypto
Use CoinBase or a similar centralized exchange to buy crypto if you don’t mind submitting “Know Your Client (KYC)” documentation, but DO NOT keep them on the exchange after purchase. Make sure you get a hardware wallet to store them, such as Ledge Nano X. It’s a great product and will keep your private keys secure. Remember, if you don’t have access to the private keys, they are not your coins. Centralized exchanges hold the private keys of “your coins” if you keep them there. This is why you hear so many exchange horror stories of people losing millions when exchanges get hacked. An exchange creates a “honeypot” for hackers. Bitcoin, itself, never got hacked and cannot be hacked in principle unless someone spends billions, which would defeat the point.
Do Not Fall for the Hype
Remember, crypto is a long-term play! It’s tempting to be day trading, chasing the next shiny thing, and falling for the hype. Do not be a victim. I’ve talked to many traders that lost HUGE amounts during the last hype period in 2017/2018. Personally, I believe HODLing is the way to go.
Best of luck!
P.S. This was not investment advice, just a friendly suggestion from a fellow crypto enthusiast that has 5 years of experience in the field and “fancy” finance credentials.