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Benefits of Diversification in your Crypto-Portfolio. What else Other than Bitcoin?

Bitcoin price shot to the roof reaching a high of $19,666 on Sunday, December 17th, 2017 in what could be articulated to the speculation of the launch of Bitcoin future trading by CBOE and CME group. However, the same week, the price plummeted to reach a low of $14,000. The Bitcoin price has stabilized since, and remains range bound.

Benefits of Crypto Diversification 

One of the main tenets of investing is diversification. Diversification takes out the idiosyncratic risk of each individual investment, and offers a more balanced portfolio, without sacrificing returns. This protects you from a failure of anyone particular protocol, bad execution, legal issues, poor technology and so on. It does not protect you from broad based market sell off as we saw on the week of the 17th of December 2017.

Thankfully, there are more than 1350 listed digital coins, making effective diversification possible. But how to decide on which other currencies you could invest in? Read through some Altoins features and look for similar information regarding any other cryptocurrencies that might interest you:

 

  • Litecoin (LTC): Litecoin has gained twenty-five-fold this year comparing to Bitcoin which has only gained twenty-fold. Litecoin is a good investment alternative considering that it is not highly priced and has fast transaction speed. The current market capitalization of Litecoin is over $15 billion.

 

  • Verge (XVG): Verge solution is offering business and individuals with fast and efficient transaction platform while maintaining anonymity. Verge enhances security by allowing secured browsers such as Tor and 12P which don’t conceal the IP address of the user.

 

  • Ripple (XRP): Ripple joins the list of the alternative investment digital coins because of its untapped potential. Ripple offers the solution of sending money across the world very fast and it has attracted the attention of many banks; in fact, some are in the pilot testing stage. Suppose only five major banks accept Ripple, where will its price be?

 

  • Zcash (ZEC): Zcash provides a relatively high level of anonymity compared to other cryptocurrencies. Zcash transactions don’t show the sender and the amount involved. It only shows that a transaction took place. The company behind Zcash is limited too to see other people’s transaction since it is limited to Zcash transaction involving it.
About the author

Jason Manolopoulos co-founded Dromeus Capital Group in April 2008 and is the co-CIO of the firm. Jason leads the firm's investment activities is a member of the Firm's Executive and...

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