How to understand asset allocation in a cryptocurrency portfolio?

The best way to understand asset allocation in your cryptocurrency portfolio is by learning the basic asset classes of crypto. If you want high risk, invest in pure currency projects. If you want to mitigate risk, analyze the fundamentals of security tokens. If you want to wait the market out, look for stablecoins.

What is a good allocation for a crypto portfolio?

For example, a reasonable allocation for a well-balanced portfolio might be 60% (large-cap), 20% (mid-cap), 10% (small-cap), 5% (stablecoins), and 5% (NFTs). Don’t sweat it yet; we’ll delve deeper by providing practical steps for allocating your crypto assets.

Why is crypto asset allocation important?

Cryptocurrencies have emerged as a popular investment option over the last decade, with many investors looking to capitalize on their potentially high returns. However, due to the crypto market’s high volatility, crypto asset allocation is crucial in creating a crypto portfolio to maximize returns and minimize risks.