Understanding Crypto Asset Diversification - Part 2
Hello everyone, hope you all are doing good? I'm back with the Part 2 of this amazing series, Understanding Crypto Asset Diversification. If you haven't read the Part 1, I strongly suggest you that by clicking here. In today's article, I will be making a practical example of how crypto asset diversification should look like. Enjoy the read!!!
I will be constructing a Crypto Assets Diversification according to the 1 - 4 Rule. 1 - 4 Rule, is a trading strategy where traders spread their investments among 4 assets of 25% on the investment capital, meaning, amount invested on an asset is the same with the other 3 assets.
My investment capital is $60 and I will be purchasing 4 assets with $15 (25% of the investment capital) each. The exchange platform I will be using with be Binance Exchange and my account is verified.
The 4 assets I will be purchasing are;
SOL
FTM
MATIC
AXS
SOL
I will be investing mostly in Blockchain tokens rather than project tokens within a Blockchain. SOL is the native token of the Solana Blockchain, which has taken the cryptocurrency world like a storm. It provides a very fast transaction at a very low transaction fee.
The main reason why I chose this token, is that, I see the possibility of this token having a 10x in two or three years from now, hence, a long term hodl. Blockchain tokens will always increase with value, we have seen it happen to ETH and BNB price value.
Purchase Of SOL
FTM
As I said earlier, I mostly invest in Blockchain tokens rather than projects within a Blockchain. FTM is the native token of the Fantom network, and it can used as a means of payment service, transactions fees within the blockchain, for governance and staking. The use case of the FTM token is unique and interesting to potential investors.
The main reason why I chosen this token, is that, I see the possibility of this token having over 100x in two or three years from now, hence, a long term hodl. The token is currently very undervalued as at the moment of writing this article.
Purchase Of FTM
MATIC
As I said earlier, I mostly invest in Blockchain tokens rather than projects within a Blockchain. MATIC is the native token of the Polygon network, and it can used for payment service across multi-chain which has been it's major use case and with it's recent integration to Opensea platform which is the one of the most know NFT marketplace, the MATIC tokens seems to have a bright future.
The main reason why I chose this token, is that, I see the possibility of this token having over 100x in two or three years from now, hence, a long term hodl. The token is currently very undervalued as at the moment of writing this article.
Purchase Of MATIC
AXS
All of my assets shouldn't be all native tokens of Blockchains, that's why I went for the AXS tokens, a game based token that has lead to the increase adoption of cryptocurrency around the world. The AXS token is the token used in a crypto based game called Axie Infinity.
The main reason why I chose this token, is because, games are very addictive and people are going crazy over this particular game. I see this token having more than 15x in two or three years from now, hence, a long term hodl.
Purchase Of AXS
My Portfolio Using The 1 - 4 Rule
Truly a master class. I love the examples, it is the best way to teach. I appreciate the time you took for it, I value it very much. And of course I will follow the series. I will read part 1 and keep an eye out for part 3.
Best regards.
I'm very glad and delighted that you value the content.
Thanks for your encouraging comment @garybilbao
Hi @menoski, interesting selection of tokens.
I have never worked with Fanton, but I have listened to it. Solana, a clear sign that it is.a project that promises a lot,.and surely in a few years we will have a Blockchain strengthened with a very strong token.
Matic, I have a.few as well, in the long term.
Particularly I don't have AXS, even when I have axies, I was mining Ron, which is the new token, and it's really the Red ron token, but you can't buy it, unless you do it in Katana, which the DEX of the RON network. My money is on Ron rather than AXS
However, this is my opinion, not financial advice.
Regards. Good series of post.
First time I'm hearing of RON tokens. I will go and do my research on it. If you are looking to invest in a quality, transparent and brilliant project, I might suggest EGC tokens. You won't regret it. Although, this is not financial advice, do your thorough research before investment.
Thanks for your excellent comment @josevas217
Nice exposition on crypro assets diversification. The 1-4 rule you mentioned here is very important, so as not to centralise one's funds on just one token.
Thanks for sharing this educational piece bro
The 1 - 4 rule is an excellent way to diversify one's asset in order to reduce one's chances of a huge loss of one's investment capital.
Thanks for your wonderful comment @samminator
Hello friend
You have shared a very nice publication about the asset diversification and the second part is equally useful as the previous one and even the third part that I have visited today is also pretty good in terms of knowledge related to diversification. Great post