50/50 Balance Crypto Portfolio
Key Insights
- Allocating 50% to each Bitcoin and Ethereum creates a balanced exposure between the largest crypto asset and the leading smart contract platform.
- The equal weighting provides diversification across blockchain use cases, with Bitcoin providing a store of value and Ethereum allowing to participate in the development of decentralized tech.
- Maintaining an evenly split allocation can mitigate volatility by smoothing exposure to both stability from Bitcoin and growth potential in Ethereum.
This diversified portfolio is a balanced mix of two leading cryptocurrencies. This strategy of asset allocation allows for a diversification of investments, participation in the growth of the crypto market and gives investors the opportunity to profit from the dApps sector based on the Ethereum blockchain.
What Is Asset Allocation and Portfolio Diversification
A crypto portfolio is a strategic combination of digital assets for investment purposes. To invest in a balanced way, it is important to understand the concept of a crypto portfolio strategy. Those strategies enable the balancing of risk and reward across a variety of blockchain projects.
These points are necessary to make informed financial decisions. Portfolio diversification is aimed at the same objective. Diversified portfolio helps reduce the volatility of the portfolio. Coincidentally, the traditional market portfolio consists of bonds, domestic stocks, short-term investments, and international stocks.
Additional assets for a traditional market diversified portfolio include sector funds, commodity focused funds, and real estate funds. As with a crypto portfolio, the main objective is not reduce risks but to prevent the hazard of market volatility over time.
This 50/50 crypto portfolio is aimed at ensuring growth potential and risk management. Thus, it helps provide and combine leading crypto investing strategies. Below you can see the reasoning behind this type of portfolio diversification.
Bitcoin
Bitcoin (BTC) — 50%
Bitcoin, the first and largest cryptocurrency based on blockchain technology. It’s known for its long-term stability and high market capitalization.
Bitcoin is comparable to gold in its limited issuance, but has a higher degree of mobility. Over the entire history of BTC existence, globally, it’s shown exceptional growth, which is associated with the development of the crypto industry and the influx of funds.
The future of Bitcoin as an investment asset, though, isn’t defined, therefore it’s not worth investing the entire amount allocated for investment in crypto.
Ethereum
Ethereum (ETH) — 50%
Ethereum is the second largest cryptocurrency by market capitalization and a blockchain platform designed to create smart contracts and decentralized applications (dApps). ETH is often called the fuel for working on the Ethereum blockchain and it’s a key player in the development of DTechnologies.
Ethereum is an ecosystem project where users need to spend ETH coins to use the ecosystem’s products.
Thus, we believe in the development of Ethereum as an ecosystem and the growth in the use of its coin, which contributes to the growth in value.
Users can get any of the portfolio coins on SimpleSwap or via the widget below this article.
Summary
Crypto investment is better viewed as a long-term endeavour. The cryptocurrency market can experience significant fluctuations, and a long-term strategy can help avoid reacting to short-term price changes.
The information in this article is not a piece of financial advice or any other advice of any kind. The reader should be aware of the risks involved in trading cryptocurrencies and make their own informed decisions. SimpleSwap is not responsible for any losses incurred due to such risks. For details, please see our Terms of Service.
