Thinking About Investing In Crypto? Here Are 3 Things You Have to Know
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Loading... - Sylvie Payet
- 20 Apr 2023
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Crypto can be intimidating. But knowing these three things can help you create a successful portfolio.
Since the new year, the collective crypto market cap has increased by about 60% and is at levels not seen since June 2022. With this renewed momentum, crypto is once again on the radar for investors.
Because of this rally, it's likely that some new investors are considering gaining some exposure to crypto. If you're one of them, there are a few things to keep in mind to make sure your portfolio is set up for success.
1. Simplicity wins
Keeping a simple portfolio is crucial in minimizing risk, because crypto is one of the riskiest asset classes out there. Diversification is also key, but so is not overcomplicating your portfolio. You need to make sure your portfolio has sufficient exposure but isn't overweighted in the most speculative assets.
Remember, it isn't uncommon for obscure cryptocurrencies to become worthless and cease to exist.
2. Volatility is part of the game
Another thing to keep in mind is that the cryptocurrency market is highly volatile -- orders of magnitude more volatile than the stock market. It is not uncommon for the value of cryptocurrencies to fluctuate wildly over the course of a year. Not to mention, these assets can sometimes swing by double-digit percentages one way or the other on a daily basis.
However, volatility should not discourage investors who have the goal of investing in cryptocurrencies for the long term. Therefore, short-term movements should be overlooked as a feature of emerging asset classes. Read More…
