Crypto Strategy: Asset Allocation Between Infrastructures and Ecosystems

The adoption of exchange-traded funds (ETFs) based on Bitcoin and Ethereum represents a significant development for the crypto market.

ETF, as a financial instrument, appeal to a vast variety of investors, including those who prefer to avoid directly buying and holding cryptocurrencies due to technical complexities or security concerns.

The increased availability of BTC and ETH through ETF could lead to significant capital inflows into the crypto market, which could launch a prolonged bullish trend.

For those who seek not just to follow the crypto market but to maximize its opportunities, an unusual but effectiveinvestment strategy is offered. This crypto strategy focuses on diversification. The asset allocation is done in a way to include core cryptocurrencies, infrastructure projects, DeFi projects, Proof-of-Stake crypto assets and Layer 2 projects.

This trading strategy is aimed at those who are willing to explore and invest in the broader ecosystem supporting and developing the major cryptocurrencies, which will help not only participate in the expected growth of BTC and ETH, but also benefit from the growth of related projects and technologies that play a key role in the future of the blockchain industry.

Asset Allocation: Core Cryptocurrencies

• 40% in BTC

Bitcoin, as digital gold and pioneer, plays a key role in the crypto portfolio.

BTC is a global standard of digital value and a symbol of resilience in the investment world. Bitcoin provides stability and reliability to investors. Bitcoin provides a reliable store of value and liquidity benchmark. Bitcoin takes a crucial place in this investment strategy.

• 20% in ETH

Etherium, with its leading position in smart contracts and decentralized applications, is also important to the crypto strategy. Thus, including ETH into this investment strategy via asset allocation is well deserved.

ETH is included in the portfolios of a diverse range of investors, with the objective of achieving stable, although not explosive, growth.

Investment Strategy: Crypto Infrastructure Projects

• 10% in Chainlink (LINK)

Provides smart contracts with external data, which is essential for many dApps, making Chainlink an important element of blockchain infrastructure. All of that earns Chainlink a spot in this crypto strategy.

Chainlink is an oracle service, enabling smart contracts to fulfil their functions. It facilitates connectivity between blockchains and external data.

• 5% in Avalanche (AVAX)

Offers a high-performance blockchain with fast transaction confirmation times and high throughput, making it suitable for building a variety of decentralized applications, and eligible to appear in this crypto strategy.

The Avalanche protocol employs consensus mechanisms like its snowman model to offer high throughput for building dApps while allowing for custom subnet creation catered to diverse use cases.

Asset Allocation Between DeFi Projects

• 4% in Aave (AAVE): Protocol for lending and borrowing.

AAVE is the leading DeFi lending protocol in terms of total volume. AAVE provides users with the ability to borrow and lend cryptocurrencies through the use of smart contracts technology, eliminating the need for third parties.

• 3% in Uniswap (UNI): A decentralized exchange.

Uniswap is a DEX that streamlines the provision of liquidity. The Uniswap exchange is a decentralized platform that utilizes automated liquidity pools in lieu of order books to facilitate direct token swapping.

• 2% in Compound (COMP): A protocol for lending.

Compound is a prominent DeFi lending protocol that enables users to borrow against cryptocurrencies and earn interest on their crypto assets by adding them to lending pools.

• 1% in Maker (MKR): A platform for issuing stable DAI coins.

The Maker protocol is the 3rd largest blockchain protocol in terms of blocked assets (TVL) according to DefiLlama rankings.

Asset Allocation Between Proof-of-Stake-Based Crypto Assets

• 3% in Cardano (ADA)

Cardano focuses on security and scalability through its innovative consensus approach. This blockchain aims to provide a high degree of security and the ability to scale to support a variety of dApps.

The ADA can be used to send and receive value on the Cardano network, as well as to pay for transaction fees and network operations. ADA holders have the opportunity to participate in the governance of the Cardano network by voting on proposals and updates.

• 3% in Solana (SOL)

Solana is a high-performance blockchain designed to create dApps capable of handling high transaction volumes with low latency. This project has superior throughput and scalability due to its unique architecture.

SOL cryptocurrency is fast and has low transaction costs, which could open up new use cases for blockchain and accelerate the growth of innovative DeFi products.

• 2% in Harmony (ONE)

Harmony is a blockchain that utilizes the Proof-of-Stake algorithm to ensure the security and efficiency of its network. Its focus is on improving performance and scalability, making it an attractive option for building various dApps.

ONE is the native cryptocurrency of the Harmony network, serving as a multi-purpose token. ONE can be used to pay for various network services and functions. Furthermore, holders of ONE crypto can participate in Harmony network governance, as holding ONE grants them voting rights.

Investment Strategy: Layer 2 Projects

• 3% in Polygon (MATIC)

Polygon is a scaling and cost reduction solution on the Ethereum blockchain. This protocol improves the performance and efficiency of Ethereum by enabling faster and cheaper transactions.

Polygon provides developers with tools for creating custom multi-chain applications through its development toolkit (Polygon SDK), making the platform attractive to developers and eligible for this crypto strategy.

• 2% in Optimism (OP)

Optimism offers optimistic rollups to improve the performance of Ethereum.

This project aims to increase Ethereum's bandwidth, reduce transaction fees, and make the network more scalable.

• 2% in Arbitrum (ARB)

Arbitrum is an Ethereum scaling platform that enables the creation of decentralized applications with high performance and efficiency.

This project provides fast and low-cost Ethereum-based transactions, improving user experience and empowering the blockchain.

Crypto Strategy: Long-term Perspective and Rebalancing

• Review and rebalance your crypto portfolio

This investment strategy implies that every 6-12 months, investors need to review and rebalance the crypto portfolio to adapt to market and news changes.

• Keep an eye on regulation

Using this crypto strategy investors need to keep a close eye on regulatory changes and the overall health of the crypto market. This will allow for reacting to potential risks and opportunities in a timely manner.

Users can get all mentioned coins for fiat or crypto on SimpleSwap.

Summary

This crypto strategy takes a broad approach to investing, minimizing risk through diversification and covering different segments of the crypto industry.

The investment strategy at hand allows for an asset allocation between key elements, such as BTC and ETH, infrastructure projects, DeFi protocols, P-o-S-based assets, and Layer 2 projects.

By taking advantage of the benefits of adopting BTC and ETH ETFs, investors can build a stable and potentially high-yielding portfolio that can withstand market fluctuations and provide growth over the long term.