3 Foolproof Ways to Build Your Crypto Portfolio

If you have kept up with recent news and trends, chances are, you already heard of cryptocurrencies – or Bitcoin at the very least. 2017 was a fantastic year for cryptocurrencies and crypto investors alike. The first and most popular crypto, Bitcoin, increased its value from around $938 at the start of that year to over $20,000 by the end of the year.

So much money was made overnight, many people and financial experts suspect a bubble, and that a market crash will come soon enough. Well, Bitcoin maintained its high-value today ($10,750, but it obviously cannot sustain its performance in 2017.

Along with the increased value of Bitcoin in 2017 is an increased public interest in cryptocurrencies. Many had finally taken notice of Bitcoin and what cryptocurrencies really are. And if you are one of those people who are already thinking of investing in cryptocurrencies, you might want to consider the following:

Do your homework.

With Bitcoin’s great performance in the past, many were tempted to join right in. There are also many people who will try to lure you in investing in certain cryptos, with the promise of giving you more than a 100% in returns, but whether that is true or not, it is best to take a step back and do your research first.

In any investment, things could go wrong. Cryptocurrencies and Bitcoin are no exceptions. Prices could fall suddenly, and you will lose your investments in a blink of an eye. Although there is a chance that prices could soar to unbelievable rates, the reality is, crypto prices are very volatile – and they could also go down without much notice.

That’s why before you jump in, you have to do extensive research. Know everything about cryptocurrencies first. If you are introduced to a new crypto coin, you also have to know its performance, background, and what assets are backing the coin. Gather information as much as you can before deciding to make an investment.

Identify your risk appetite.

In investing, risk appetite means the attitude of the investor when it comes to risk-taking and investing goals. Some people have a high-risk appetite in investing – these are the ones who bet on big returns, but are willing to shoulder bigger risks too. Some are also conservative – this means that they make meager investments, and are okay with meager but stable (and safer) returns also.

You have to identify what kind of investor will you be. Knowing your risk appetite is essential so you would know where to channel your crypto investments. If you are betting for high returns for a certain coin, you can make use of a reliable crypto trading platform that can help you buy coins at a low price and sell them later at a higher price.

Learn to diversify your investments.

Any financial consultant will tell you to diversify your investment – this also applies to cryptocurrencies. Like stocks, best practices dictate that you should invest in blue-chip stocks and non-blue chip ones. In cryptocurrencies, this means that you should put some of your investments in established coins such as Bitcoin, Ethereum, and Lite Coin, while also investing in lesser-known coins that have the potential to break into the mainstream.

Investing in cryptocurrencies could be a bit tricky because of the technicalities involved. As much as possible, consult with an expert and read more articles about how crypto coins work before deciding to part some of your hard-earned money into such investments.