Chapter 5
Diversification in Cryptocurrencies
IN THIS CHAPTER
Understanding how diversification helps your portfolio
Exploring long-term diversification methods with cryptos
Seeing short-term diversification strategies for cryptocurrencies
This book covers diversification in a few chapters, specifically Chapters 2 and 4, and also Book 1, Chapter 4. This chapter gets to the bottom of what diversification means for your crypto portfolio, why it’s important, and how you can manage your portfolio’s risk by properly diversifying your assets.
Breaking Down Some Basics on Diversification
Small investors regularly hear about the topic of diversification for their personal stock portfolio. One of the first things a financial expert tells you when you want to get started with investing is “don’t forget to diversify!” You don’t want to put all your eggs in one basket, regardless of whether that basket is stocks or cryptos. The following sections dig into what that really means, especially for cryptocurrency investing.
What is traditional diversification?
When you’re building your personal stock portfolio, diversification often means having more than one or two stocks. The most conventional ...
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