Diversifying Your Crypto Portfolio Does Not Always Work

[Nomad]

Seasoned investors often talk about diversification to reduce risk, but in crypto world, diversification doesn’t always work. Most crypto prices are linked with Bitcoin, so when Bitcoin rises, most coins also rise and when it falls, nearly the entire market follows the trend. There might be exceptions but that is usually the case and due to this correlation, diversifying doesn’t always protect you from losses.

 

[Suba]

While many cryptocurrencies correlate with Bitcoin's price, there are also many that frequently move in the opposite direction or deviate from Bitcoin's price, such as stablecoins, Monero, Chainlink, XRP, Tron, and others. Therefore, diversification is still necessary to maximize profits, such as from staking, gamefi, defi, and stablecoins.

 

[kit_hung]

Most cryptos follow the price of Bitcoin. others like stablecoins Monero Chainlink XRP and Tron go other way. Diversification still important to gain profits through staking gamesfi defi and stablecoins because balance brings strength.

 

[Augusta]

That's right not the right things would continue to work all.the time. With this we can still experience losses

 

[kit_hung]

Right. I have seen that it is normal for crypto businesses to make losses, but I plan to make a profit.