The Merkle

Wall Street Investors Diversify Their Crypto Portfolios, and You Should Too

It is an open secret that plenty of Wall Street experts are paying close attention to the various cryptocurrencies out there. Moreover, some people will gladly share their portfolios with the rest of the world. A recent CNBC broadcast revealed one investor’s portfolio and an interesting diversification strategy. Whether or not investing in these particular currencies is a smart decision remains to be seen.

Cryptocurrency Diversification is Necessary

It is never best to put all your eggs in the same basket when it comes to making strategic investments. This maxim applies to virtually any form of investment one can think of. In fact, it may be even more applicable to cryptocurrencies, given the vast array of coins out there. Even Wall Street experts who invest in cryptocurrencies are not going all in on specific currencies right now. That is a solid approach, although it is always interesting to see what people are actually investing in.

According to this specific portfolio, there is a very strong focus on “other” cryptocurrencies. This seems to indicate people are effectively buying small amounts of various currencies to ensure they maximize their profits over time. It is more apparent than ever that cryptocurrency is not just about Bitcoin, as there are a lot of cryptocurrencies which hit all-time highs earlier this year or are on the cusp of new highs.

This particular portfolio is equally invested in both Bitcoin and Bitcoin Cash. That in itself is another pretty significant indicator. While members of the entire community may not see eye-to-eye on a lot of things right now, it is evident Bitcoin and Bitcoin Cash will continue to thrive for quite some time. A lot of people assumed the BCH value would have collapsed by now, but the opposite has been true. Allocating a significant portion of one’s portfolio to these two currencies may be a smart decision in the long run.

We see similar trends where Ethereum and Ethereum Classic are concerned. For all intents and purposes, the year 2017 has been an extremely good year for both of these currencies. There is also some interest in Zcash, despite concerns that transactions are not necessarily private at this point in time. Perhaps the most interesting investment on this list is Metal, an altcoin which has not made that much of an impact on the market. It has a very low market capitalization of US$127 million right now, but it certainly has the potential to rise in value.

One currency that is notably absent from this list is Litecoin. It may not necessarily have the appeal of Bitcoin or Ethereum right now, but no one can deny that particular cryptocurrency is here to stay as well. In fact, the Litecoin price recently surpassed US$100 for the first time in history. This currency was valued at under US$3 not long ago, which demonstrates its solid growth. It is also one of the cheapest and easiest ways to move funds between exchanges, due to low fees and fast transaction times.  

How a portfolio like this one will perform in the long run remains to be seen. It is of the utmost importance to spread one’s investment across various cryptocurrencies. Not all of them will note major gains in the same year, but those which have solid foundations will eventually succeed. This is only the beginning of what is in store for cryptocurrency moving forward. We may see some spectacular price movements in the coming months and years.