{1 - 24} GreyGrey
{25 - 49} GreenGreen
{50 - 499} BlueBlue
{500 - 4999} OrangeOrange
{5000 - 24999} RedRed
{25000+} BlackBlack

Please confirm that you would like to report this for an admin to review.

How diversifying a crypto portfolio increases investor risk?

Confirm that you would like to Remove Email Alerts for your question. You cant undo this and you will not be able to re-subscribe.

1 Answer

It would appear that cryptocurrencies are highly correlated in terms of price. The benchmark price is that of bitcoin (BTCUSD). When bitcoin gets a cold, shitcoins get the flu. So buying a diversified portfolio of cryptos actually concentrates risk rather than diversify it.

Apparently the strategy of buying the 4 or 5 largest coins by market capitalisation and selling the same dollar amount of all the other cryptos is a way to reduce risk and see a positive return. More on https://cryptonewstrends.com

I suggest you sell your crypto portfolio. As the US Fed raise interest rates, many assets have started to drop in prices. If a full blown crisis develop, there will be deflation which will likely bring up real interest rates. Cryptos don’t do well when real interest rates are positive. Currently real interest rates are close to zero or negative in different countries.

Good luck.

Confirm that you would like to select this answer as the "Best Answer" to your question. This will bring this answer to to top and be highlighted as "Best Answer". You can always change this if a better answer is given.

You must be Logged In to Answer this Question

Already a Member, Log In
Not a member yet? Sign Up


happy wheels