It's a cliche to say after so much time and history repeating itself over and over that crypto markets are volatile. Volatility and reverse movements are constants that repeat themselves in cycles when it comes to crypto. With that in mind, crypto investors can be forgiven for feeling the uncertainty about how the crypto assets from their portfolios will evolve upwards or downwards in the future.
What can we do as crypto investors to shield the portfolio against volatility periods? First of all, is a moderate diversification with similar amounts spread on multiple cryptocurrencies, but up to 10 assets. Why just 10? Because these would be still manageable if put in different earning mechanisms and at least 2 of them should be stablecoins. Keeping this ratio we'll ensure 20% of the portfolio is in stables which will help us navigate bear markets and also create "Buy the DIP" opportunities when the right time comes.
Resilience is another thing that we need to prove while our crypto assets perform one way or the other. Regardless of the backdrop, reacting to every tweet or headline is never going to be a good strategy. Buying on hype usually means a fallacy at a later point, while selling when the bears are poking all over the market will get the weak hands losing. We need to get over the market noise and believe in the tokenomics of chosen cryptocurrencies and why we invested in them in the first place. If it was put reason behind the decision and that still applies, just HODL!
Stablecoins should be part of the portfolio and put at work all the time. We have great examples of UST on Terra and even HBD on Hive which is providing 20% APRs and even more. These will ensure the stability of our portfolio over time and should not be ignored at any point. I think this is what most of the investors are overlooking which is disarming them in troubled times.
These I think are some simple things to consider when refining our crypto portfolio and let us navigate easier volatile markets. I hope to check them all soon, but I still need to balance some assets to achieve those. I wonder what other refinements you consider useful on a crypto portfolio...?
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