Crypto Portfolio Management
Take the profits: If one of your bags starts pumping like crazy and as a result taking up a large percentage your total portfolio by percentage then it may be time to consider trimming the position. Let’s say your ideal allocation for coin X is 5 to 10% but it is currently 25% of your portfolio. Well….. consider cutting some of that position. Take profits on it and either add to other positions or more your stablecoins to a lending platform while waiting to enter your next position. On a similar note, I rarely allocate more than 1 to 3% of my portfolio into a new position. This reduces risk but can still capture significant upside.
Always have free money: You can’t buy the dip if you don’t have any chips! At any given time 5 to 10% of my total portfolio is in USDC. Half of more will be lending or in a defi protocol earning yield. I’m not saying these percentages are ideal, it is just what I’m doing. But having dry powder at the ready to buy dips or to get into new opportunities is very important.
Take Full Advantage of Investments: Not using your assets is a very common mistake that investors are making. Can you stake your coin? Then do it! You are robbing yourself if you don’t. Likewise, assets like Bitcoin, which have no staking rewards, can still be lent out after wrapping it. There are of course tradeoffs, but also benefits! Ask yourself if the rewards are worth the risk, and if so, then explore your options, because while 6% a year does not sound like much, it actually adds up rather quickly. You can even stake on centralized exchanges like Binance
BTC and top 10 coins are good for holding, but try not to get married to a coin that you were only intending to be in for a short time. Otherwise, you may end up holding an underwater bag for a very long time.