In the crypto space, Diversifying your portfolio simply means investing in other crypto assets rather than just one. This singular action comes with advantages; It increases your exposure and knowledge in other crypto assets and also serve as risk management strategy against crash of a crypto asset.
Let’s dive into some notable assets in the crypto space:
1. Bitcoin (BTC)
- Bitcoin is the first digital currency, also referenced the “digital gold”. Created by an anonymous person or group of people using the pseudonym Satoshi Nakamoto, introduced in 2009.
Bitcoin is considered a store of value with a maximum supply of 21 million. With an all time high of $69,045 per BTC during the last bull run in November 2021 but presently valued at $26,200 due to the bear market.
The next bull market will redefine its worth.
2. Ethereum (ETH):
Ethereum is a blockchain platform that allows developers to build decentralized applications (DApps) using smart contracts. Ethereum was conceived in 2013 by Vitalik Buterin, alongside other founders.
ETH is the native cryptocurrency of the Ethereum network and is used for gas fees (transaction fees) and as a store of value.
Presently valued at $1580 per ETH, the next bull run should give new all time high (ATH).
3. Binance Coin (BNB):
- Binance Coin is the native cryptocurrency of the Binance exchange and Binance Smart Chain. Changpeng Zhao is the founder and CEO of Binance.
- It has various use cases within the Binance ecosystem, including paying for trading fees, participating in token sales, and using DApps on the Binance Smart Chain.
- Binance conducts periodic token burns to reduce the supply.
The buyback plan of BNB by Binance will definitely increase it’s value.
BNB was valued at $680 per BNB during the last bull market but presently valued at $210. Due to it’s versatile utility, it’s presently undervalued.
The cryptocurrency market is highly volatile, so prices can fluctuate rapidly.
A good risk mitigation in crypto is to never invest more than you can afford to lose, also Practice Dollar Cost Averaging (DCA) into crypto assets with great utility and value.