Diversify Your Crypto Portfolio
THINGS I WISH I KNEW
Bitcoin is not the only cryptocurrency. If you are someone like me, you have often used Bitcoin when talking about cryptocurrencies in general. But our portfolios will suffer if we don’t look beyond Bitcoin.
Bitcoin is by far the most popular cryptocurrency and on top of that, the first-ever blockchain. In fact. Bitcoin has dominated the crypto industry so much that any cryptocurrency that is not bitcoin is called an Altcoin. Which stands for Alternative coin.
The Breakthrough of Bitcoin
Bitcoin was first introduced in 2009 and since then, it has risen from being worth mere pennies to over $60k dollars in value. As of today, it is worth over $44k. The price may be different by the time you read this, but I will bet it’s still worth many thousands of dollars.
The first cryptocurrency has now received worldwide recognition and has managed to keep all the other cryptocurrencies in the shade. Only Ethereum comes close to Bitcoin in Market capitalization and price. But yet the second-largest crypto is worth just a little over $3,000 by the time of writing this article.
Diversify Your Crypto Portfolio
However, many other cryptocurrencies are worth looking into. Bitcoin came first with the promise of correcting the flaws we have with our financial institutions. Ethereum, on the other hand, is trying to solve scalability issues on the Bitcoin network. And new blockchains continue with many new cryptocurrencies each promising more improvements.
Where to start
When I came into crypto, my lack of knowledge made me believe that Bitcoin is the only real cryptocurrency and every other coin is just replicating Bitcoin.
I later realized that Bitcoin is not the only real coin but just the first cryptocurrency. Many other projects have leveraged the Bitcoin blockchain to bring forth other promising projects. Like Ethereum which is creating a platform for dApps with a feature called smart contracts.
There are several other projects that have come up with even better ways to scale up the blockchain and reduce energy consumption which is one of the cons associated with both Bitcoin and Ethereum. These blue-chip cryptos are born from proof-of-work blockchains which some believe use too much energy.
When first starting, it is better to stick with blue-chip cryptocurrencies like Bitcoin and Ethereum and maybe others like Cardano ADA. The Cardano network is a proof-of-stake blockchain that uses less energy and allows for staking crypto to earn rewards. All four of these coins have already made their way to the top ten list of crypto according to market cap and all have growing communities where you can join and learn more about them. (Remember this is not financial advice.)
Diversify your crypto portfolio
That brings us back to the topic of portfolios. When you move into crypto, you will likely come across two types of people. People who are only focused on Bitcoin are sometimes referred to as Bitcoiners or bitcoin maxis because they focus solely on Bitcoin. Most of them rarely look at other projects.
Then there are Altcoiners, these are people who diversify their crypto portfolio with several projects. It’s worth mentioning that there is a third group of people who are referred to as Shitcoiners. Do not mistake them for Alcoiners. Shitcoiners are people who do not research projects before buying their tokens. They tend to be people who follow the news hype and buy whatever others predict to be the new gem.
Altcoins and Bitcoins
Altcoiners on the other hand are the complete opposite, they are the people who are the real crypto enthusiasts. They follow projects carefully and analyze the probabilities.
These are people who diversify their portfolios. They believe in Bitcoin but are also open-minded to other projects that promise better innovations.
When I started, I had no knowledge about the difference between Bitcoin and other Cryptocurrencies, but today there are several projects I admire and have even invested in.
The decision is now yours. Do you prefer to stick to just Bitcoin, or you are open to other cryptocurrencies that have promising visions?
What is your Choice?
Whatever your choice, remember that we are just at the beginning of this wonderful technology, and focusing on only the first cryptocurrency may be limiting the potential of your portfolio.
Many other projects have added better functionalities that can help us maximize the benefits of blockchain technology.
It Is Important to Diversify Your Crypto Portfolio
Another thing to keep in mind, is always join a project with a vision that you can understand. This is because a cryptocurrency’s value is not just determined by its price on an exchange. Its value is also measured by its success at solving societal problems. This is why a powerful management team is so important to a project’s long-term viability.
Please continue exploring our website if you want to learn more about safely investing in crypto. You can join us here on Life with crypto to connect with other crypto enthusiasts and experts in the industry. We have lots of great content that will help you understand crypto and guide you to be a better investor and trader.