Many new crypto traders focus on buying a single coin. However, their crypto performance is relegated to the sentiment, development, and community behind that project.
Building a balanced crypto portfolio can help guard against excessive losses, as some projects will perform better than others.
In today's video, we're going to wake you up to the cryptos you need to own to be a Millionaire.
So, watch this video all the way through so you don't miss anything.
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The advantage of a balanced portfolio is diversity. Holding onto a single coin exposes you to the ups and downs of news that affect only that coin.
Ripple is another example of this dynamic. Recently, U.S. government agencies have focused on whether Ripple initially violated their regulations. Ripple sold out to the news. Crypto-currencies are largely unregulated and the laws surrounding them are still being created. Therefore, investing in a single coin ties the returns on your crypto investment to the performance of that single coin.
A side benefit of a balanced crypto portfolio is that when you spread out your investments, you have a better chance of picking a coin that super performs. Indeed, the reason there are nearly 20,000 crypto-currencies is that each one tries to improve an actual problem with crypto-currency.
Bitcoin is the largest and oldest crypto-currency and has stood the test of time. However, we don't know if there will ever be another coin worth more than Bitcoin if that new coin improves some fundamental quality. When looking for crypto-currencies, look for projects that can solve real problems. For example, Chainlink's solution to the oracle problem could be a potential alternative that will one day take off.
Having a diversified portfolio allows you to rebalance your portfolio so that it does not become overweight in certain areas.
For example, let's say you have invested in three rooms: room A, room B, and room C.
You decide to allocate 50% to room A, 25% to room B, and 25% to room C. You further decide to allow the percentages to deviate by 10%. Coin A skyrockets and, as a result, now represents 60% of your crypto portfolio. Therefore, you decide to sell some of coin A and buy coins B and C to rebalance the 50-25-25 split. In this way, you use the gains from your overperforming crypto to fund the rest of your portfolio.
Having a balanced crypto portfolio means you are halfway to creating a sustainable portfolio. Investing in digital assets is relatively new, with a lot of intimidating terminologies.
Take the time to learn and analyze them thoroughly before diving in headfirst. If you're ready to build, you need to pay attention to some fundamental pillars to help you achieve that balance and manage your crypto portfolio.
Many investors may not have a large lump sum that they can transfer from traditional investments to a crypto portfolio. Therefore, making small regular investments from your cash flow, regardless of crypto prices, is a great way to build your portfolio. Therefore, dollar cost averaging is one of the best trading strategies to build your portfolio that works in both bull and bear markets.
Dollar-cost averaging (DCA) is an automatic system for making investments of a fixed dollar amount, regardless of the price of a token. By entering the investment in regular increments, you alleviate the anxiety resulting from imperfect timing.
As you build your portfolio, you may need to manage several different portfolios, exchanges, and platforms, allowing you to take advantage of promotions. As a result, it can be tedious to manage your cryptocurrency portfolio across these wallets and try to remember which crypto-currency is were.
Crypto wallet trackers are one way to solve this problem. A crypto wallet tracker is a software that reads your wallet data and displays the aggregated information in a dashboard for you. Wallet trackers make it easy for you to keep track of how much you have invested in each cryptocurrency. If one crypto-currency outperforms another, you'll see it earn a larger percentage of your overall portfolio.
A good portfolio management strategy includes diversifying your investments. You've heard the saying that you shouldn't put all your eggs in one basket. In case the basket falls, you don't want to lose all your eggs.
If you want to know which cryptos have a solid foundation, we are about to tell you 4 altcoins to invest in the long term to build a small fortune of a million dollars.
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#1: Polygon (MATIC)
In our opinion, the first altcoin to turn to if you want to build a $1 million portfolio is Polygon Matic.
Polygon is the first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a modular, flexible framework that supports building multiple types of apps. Using Polygon, one can create optimistic rollup chains, ZK rollup chains, stand-alone chains, or any other kind of infra required by the developer.
Polygon (MATIC) is the Ethereum internet of blockchains and is a layer 2 solution. While there are many other layer 2 solutions and other blockchains competing with Ethereum, he owns one of the better layer 2 solutions.
#2: Avalanche (AVAX)
Then, we have Avalanche.
Avalanche is the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality. Avalanche is blazingly fast, low cost, and eco-friendly. Any smart contract-enabled application can outperform its competition by deploying on Avalanche. AVAX is the native token of Avalanche. It is a hard-capped, scarce asset that is used to pay for fees, secure the platform through staking, and provide a basic unit of account between the multiple subnets created on Avalanche.
#3: Solana (SOL)
Your third altcoin to hold is Solana.
Solana is a highly functional open-source project that banks on blockchain technology’s permissionless nature to provide decentralized finance (DeFi) solutions. While the idea and initial work on the project began in 2017, Solana was officially launched in March 2020 by the Solana Foundation with headquarters in Geneva, Switzerland.
The Solana protocol is designed to facilitate decentralized app (DApp) creation. It aims to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain.
#4: Cardano (ADA)
Finally, we have Cardano.
Cardano is a proof-of-stake blockchain platform that says its goal is to allow “changemakers, innovators, and visionaries” to bring about positive global change. The open-source project also aims to “redistribute power from unaccountable structures to the margins to individuals” — helping to create a society that is more secure, transparent, and fair.
Building your $1M crypto wallet doesn't have to be complicated. However, it does require a plan and perhaps some help like a portfolio tracker. Even if you don't have the excess cash to invest now, you can use dollar-cost averaging to build a balanced portfolio. As with any investment, you'll want to research the fundamentals of an asset before you buy it. The value of your portfolio is often a result of how well you manage your crypto assets.
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