According to a recent study conducted at Yale, every portfolio should have at least 4.4% to 6% Bitcoin as part of your crypto portfolio. If you add crypto, you will also need a crypto portfolio tracker to keep an eye on the value of your investment.
Many investors scoff at cryptocurrency, and even though the trends have not been steady, blockchain technology is here to stay, as evidenced by the growing market cap of various coins.
The market has morphed since we first heard about this technology. It has changed from a fledgling technology that had promise, into a disrupto of the global financial system.
How can you get in on this? The answer lies in having a crypto portfolio.
Cryptocurrency investment is very similar to regular investing in the stock or forex markets. However, to put together a good crypto portfolio, you require more than the names of the currencies or their equivalents in fiat money.
We dedicate our website to bringing you all the information you need to make crypto portfolio creation easy. You opened this website, hoping it will be useful. Our website has the knowledge to guide you through crypto portfolio creation and provide a great crypto portfolio tracker to boot.
We are going to talk about creating your crypto portfolio creation to make sure you have some stake in the future of cryptocurrency.
Optimal Asset Allocation / Building a Crypto Portfolio
Optimal asset allocation refers to the way people mix investments to make sure they have the safest and most aggressive approach to get more returns on investment over time. If you do not have a crypto portfolio, this section is all for you.
The optimal asset allocation in a crypto portfolio, even for skeptics, should contain cryptocurrency in one form or another. It will be a way to hedge your bets in case something does come out of this technology that takes over the market in a way that you did not expect.
You will need to have an excellent crypto portfolio tracker to monitor your investment.
How To Pick A Coin
Coin selection is something you will have to do when you decide that it is time to get a crypto portfolio. To make this easy, let’s just list the best ones first before we know which one you should go for;
- Bitcoin (BTC)
- Ethereum (ETH)
- Ripple (XRP)
- Litecoin (LTC)
As with anything, you will need to know about the coins and what they entail before you invest. For any investor worth their salt, due diligence is something you never skimp on when creating the crypto portfolio. Long-term investments are good when you think that the cryptocurrency will perform better with time.
It is up to you to choose if you want to invest in the short term or long term. Whichever you chose, a crypto portfolio tracker will help you manage all of it. As for the reasons why these four are the top, you only need to look at the market cap, performance over time, and utility to see why they are a safe bet.
How Much of Each Coin Should You Get?
Position sizing refers to the size of a position in a specific crypto portfolio or the amount in dollars you will put into a particular purchase. This technique is an excellent way for any investor to know how many units of a coin they would like to buy. It is also the reason why you need a crypto portfolio tracker.
Well, there is no way that we can tell you what each percentage will be. That is where your research into the big four comes in. You will need to look at each one, their potential, and how much you want to invest in each one. You do not even have to spread out your investment over all of the coins.
It is about finding the ones that are most promising and then making sure that you do all the research before allocating the 6% of your general portfolio in a manner that will give you the most returns or security. After allocation, you must have an excellent crypto portfolio tracker to monitor progress.
How to Create a Portfolio and Purchase Coins
Creating a crypto portfolio and purchasing coins is easy if you know where to start and what to buy. You will first have to buy the cryptocurrency from an exchange. This step comes after you have allocated amounts to the currencies you would like to include in your crypto portfolio.
With cryptocurrencies, less is more. Invest in only the top five coins. You can go as far as ten, but for the first time, five will suffice. You need to know that investing in cryptocurrency carries with it significant risk. Only invest an amount you can lose comfortably or that which you can easily monitor with a crypto portfolio tracker.
Most people recommend that 50% of the crypto portfolio be bitcoin, but this is not a rule or anything. Make a decision based on what you find out about the market at the moment that you get into it.
Use Calculation Tools For Better Crypto Portfolio Allocation
As a tool to calculate crypto portfolio amounts, Excel excels. First, you will need data to input into spreadsheets. The process may seem hard at first, but it is all really about keying in the correct numbers. We will give the formulas that you need and ways to get crypto portfolio trackers.
You can even copy-paste the figures if you have them recorded elsewhere. Make sure that the input correctly. The rest is usually up to the formula. With all the data in place, we will provide you with a simple way of using the equations to get the numbers you need for this part.
You can even use Excel as a crypto portfolio tracker and how the prices are moving concerning time and what is happening in the market. It is always good to have data to back up the decisions you make.
Get In At The Right Time
When you want to buy crypto and get into the market for the first time, we call this your entry point. Always make sure to find a good entry point to make sure that the crypto portfolio you make is sound and that you are in the clear.
The more signals you get returning positively, the better the chance that you will have a good entry. The best way to establish entry levels will require you to know some vital information about:
- Support levels
- Relative price and related cryptocurrency comparison
- Fibonacci levels
All these are tools used when people want to determine when is a good time to get into a market. It is not a must that you get into crypto. If you have to do it, do it right.