Cryptocurrency PortfolioIt takes a lot of calculations and a lot more market analysis to minimize the cryptocurrency risk to reward ratio.

Indeed, variety is the spice of life and people get spoilt for choice particularly when they think it is easy to make profits betting on popular options. It’s been only days Will Smith Slap coin has been created, it rallied around 10,000% in the coin market. For a naïve investor, this is an enticing option worth investment. In the past, many cryptocurrency alt-coins have risen and fallen only to give investors jitters. It takes a lot of calculations and a lot more market analysis to minimize the risk to reward ratio. For beginners and experienced it is equally important to build a well-balanced cryptocurrency portfolio to strike a balance between profits and losses in the ever-volatile and highly dynamic crypto-market. Besides, the mountain of information can fail you just for one random insignificant event. In this premise, investors should keep in mind a few basic principles that can help them greatly in saving their investments against unforeseen debacles.

Structure crypto portfolio right:

The size of the reward is directly proportional to the risk you can take and it is the bitter pill an investor has to swallow. The Crypto market has around 10,000 alt-coins from projects ranging from meme coins to Defi coins. For an average investor, coins that gain traction online beckon like hotcakes. However, most of the time they turn out to be a rug pull. To ensure diligence in trading routine, it is important to understand ‘tokenomics’, a means of finding out supply schedule, largest holders as well as its incentives to hold versus sell.

What to look for when choosing a cryptocurrency?

With the crypto market being flooded with new crypto coins every day, fraudulent players are having a field day. The recent Cryptofraud instances involving crypto firms like Gaincoin, and US-based  Bitconnect are a case in point. Before choosing the cryptocurrency, do check for the team behind the cryptocurrency, their reputation, and their track record. Second thing, not all cryptos have real-life use cases. Some cryptos just gain traction because a group of people wants to get it off the ground. And, few cryptocurrencies remain just speculative investment channels with no solid plan to develop as a system. Just steer clear of such cryptos for, they are the riskiest ones. Keep an eye on the publicity stunt generated by some crypto-communities such as Shibarmy for Shiba Inu, for, they are most of the time misleading.

Distribute the risk wisely among the cryptos:

In other words, it means, diversifying your portfolio. Make sure you do not lose track of your investment basket. Tools like Track Your Crypto can make the job a lot easy to have an overall picture of the odds of losing and making money, one currency vs other.  Different cryptos have different risk profiles which call for judicious allocation of money. According to Mr.Adams Haeems, chief executive of Alpha chain Capital, conservative investors can consider 1 to 5 % allocation in the asset class. With time, the allocation can be increased gradually and rebalance the profits into other assets. People who have a high-risk appetite can easily manage with 10 to 25% of allocation for cryptocurrency.

And here is the spoiler alert: Despite all the well-meaning steps one takes before taking the plunge into the crypto pool, it is only knowledge and common-sense practices that save the day.