Why are you invested in cryptocurrency?
Is it to make money, or is it to be part of a groundbreaking technology?
This is a question I, and many other people in our generation are continually asking ourselves. Because, make no mistake, this is a investment opportunity of a lifetime. This is a phenomenon.
To a beginner, this all may seem very overwhelming. Reading white-papers, partnerships, git hub code etc to see if a project is good or not. So let's break it down a little.
I will break down crypto currency projects into two categories, blue-chip currencies and currencies good for using the venture capitalist approach for investing. Blue-chip currencies should be defined as currencies that have over a 1 billion market cap.
For example, Ethereum is obviously a blue chip currency because at the time of writing this article, it boasts a market cap of $52,000,000,000. Since there is this much money already in the product, it is less volatile than currencies with less than 1 billion market cap, say, Decision Token. Decision token has a market cap of around $24,000,000, and is therefore much more volatile.
Decision token has seen a peak of about $5.50 during it's highs, and now is about $0.77. To contrast, Ethereum has seen a peak of about $1300, and now is trading for about $534. As you can see, the percentage dropped is noticeably lower for Ethereum in bear in this bear market than for Decision Token, even though neither currency has experienced any bad news.
In addition to the volatility, blue-chip cryptocurrencies usually have big-name partnerships backing them. Ethereum has names as diverse as Microsoft and J.P Morgan getting behind them, whether through talks of developing on their platform or wanting to invest in their protocol. Decision Token on the other hand has the U.N interested in them, but no giant partnerships as of yet.
If you are a risk averse investor (as risk averse as it gets for cryptocurrency, anyways), you should keep about 80% of your funds in blue-chip currencies like Ethereum to make sure that you have a steady increase in wealth. The other 20 percent should be kept in 5 or 6 projects that have the explosive growth potential of something like Decision token.
That way, even if you are wrong about 4 of the 6 projects, the 2 projects that you were right about could get big and you could get rich off of those two projects.
We will go over more risk-centric plans later, but if you have any questions, let us know on the comments below and we will do our best to update our blog so that we can explore those topics.
For now, just know to be use most of your money to experience slow and steady growth, but to keep some to try and experience explosive growth. It is another thing altogether that slow and steady could mean up to 300% in a year for an asset class like cryptocurrency, but that is a conversation for another day.
Disclaimer: This is not investment advice. We are not reliable for decisions you choose to make with your money.