As for Bitcoin, it is already back to the $23,000 threshold. Therefore the mother of cryptocurrencies is giving herself some air. If the project still represents more than 42% of the crypto ecosystem today, investing in this project alone may be risky. But also limit your earnings. Here’s why you should consider a portfolio diversification strategy!
The importance of building a diversified portfolio!
In the world of investing, diversification is one of the most important keys to success. If diversification between several asset classes is understood, it is also legitimate to apply its principles within a given asset class.
Maximum investors in the Terra ecosystem will understand, the hard way, the importance of portfolio diversification when investing in digital assets. For some, the collapse of Terra and its UST and LUNA tokens led to the complete bankruptcy of hundreds of investors. So the diversification is possibleavoid bankruptcy when a project falls.
If diversification is understood on projects with very different objectives, it can also be agreed on projects with different maturities. So, why not mix an investment strategy on the biggest projects and young shoots that make their ICO?
Applied to the field of digital assets, it is also interesting to invest in Ethereum, but also in what many call the possibilities “Killer Ethereum“. So, by putting some balls on Ethereum, it is interesting to do it also on Solana, Cardano, BNB or even Avalanche. This could cover you in case of problems on the Ethereum network. At the moment, the transition from Proof of Work to Proof of Stake is a sensitive matter for the Ethereum blockchain network.
3 complementary crypto investments with Bitcoin!
In this section, we present to you three alternatives to bitcoin. For this, we have voluntarily selected several projects with different maturity.
1 – Infinity Battle (IBAT)
Battle Infinity is a game fantasy series which is like a “Play to Earn” type game. Ultimately, the promoters of this project seek to offer a solution that will make the most of it The Sandbox and of Sorare. As for protocol, Battle Infinity is already closing Sorare for various reasons. First, because it is a “Fantasy League” type game that allows users to build their teams with players. In both cases, NFTs also represent players.
But Battle Infinity seems to want to go further. By integrating the offer of his game into a metaverse, similar to what we find on the platform The Sandbox. Although it was launched a few days ago, the project already seems very ambitious. At the moment, the development of the metaverse is not a top priority for the developers.
The IBAT token, which will be the core of the Battle Infinity protocol, is currently on sale. By investing 1 BNB in this project, you could buy more than 166,000 IBAT tokens. Many observers already agree that the project could compete with the two aforementioned behemoths. For information, Sorare already has more than 4 billion dollars and The Sandbox token has a market cap of more than 1.5 billion dollars.
2- Ethereum (ETH)
If we consider Bitcoin as the mother of cryptocurrencies, Ethereum also has its little nickname: the prince of cryptocurrencies. Many diversification theories rely on the following distribution: 1/3 for Bitcoin, 1/3 for Ethereum and 1/3 distributed among a basket of ten to 20 altcoins.
In the last few days, if the crypto market is surfing on a bullish rebound, it has mostly outperformed Ethereum. In the space of a week, Ethereum saw its price climb 50%. And it could still go on, at a time when the passage of the Promised Proof was never so close. If we are used to saying that Bitcoin is driving the crypto market, Ethereum seems to be taking the LA for several sessions. In terms of dominance, Ethereum is now close to 18% for a market cap close to 190 billion dollars. As of this writing, one ETH token is trading at $1,547.
3 – Solana (SOL)
For this last project, we chose a sign that is often presented as “Killer Ethereum“. And in many ways. If the realm of NFTs has long been the preserve of the Ethereum blockchain, Solana is gradually eating away at its market share. Until it is today, the second blockchain on this market. As evidenced by data from the Cryptoslam platform that reports statistics on the NFT market.
But Solana also wants to make a name for herself in the elite segment. A complete future market that some specialists like the McKinsey firm estimate that the sector could weigh more than 5,000 billion by 2030. That is 5 times the crypto market at current prices. The success story of 2021, the Solana blockchain was one of those that received the biggest losses during this bear market that started last fall. But for all that, the projects continue to flow on the Solana blockchain.
Also read: How to diversify your crypto portfolio?