Explained: Asset Diversification And Allocation For Cyptocurrency
In the traditional world of finance, the performance of different assets could vary under different market conditions. For example, real estate investment trusts could outperform general equities in a turbulence market, and defensive stocks could disappoint investors when the appetite for risk is heightened. That’s when diversification comes in. The main purpose of exposure to different asset classes is to balance risk and return in a portfolio. In the cryptocurrency space, diversification could also be one of the ways to manage risk exposure . However, some would argue that it is impossible to diversify a crypto portfolio due to the fact that major altcoins are highly correlated with Bitcoin . However, with a carefully selected basket of altcoins — in conjunction with stablecoins — investors could able to navigate the market more effectively with manageable risk. There has always been a debate about putting all your eggs in one basket. While in some cases concentrating on on...