You want a portfolio that can stand on its own over time but isn’t overly complicated. We’re here to help with that. Use our five tips and you’ll have a balanced cryptocurrency portfolio in no time.
Who is the Project Targeting?
Cryptocurrency projects target a wide variety of industries. You’ll find coins that aim to get a foothold in storage, finance, real estate, supply chain, and many, many more markets. That’s not to suggest that all of these industries will thrive. To have a balanced portfolio, spread your investments across several markets.
As opposed to putting all your eggs in one industry, pick several that you believe will succeed and show potential for growth. These might include options like development platforms, IoT, computing, and advertising. Take your time and do your research since technical analysis helps forecast. However, don’t invest everything you have into one project.
What Technology Does the Project Use?
You’ll quickly discover that not all cryptocurrencies make use of the same technologies and not all technologies are created equal. There are many different technologies, each with their own benefits and drawbacks. Different protocols, algorithms, and proof types have a direct impact on a coin’s adoption potential.
Market changes might support specific types of technologies, which can have a significant impact on your portfolio. That’s why you want to make sure you choose a wide variety of digital assets that use varying technologies.
Just like technology, you want to find projects with a well-rounded team. A project should have a staff with a respected group of designers, engineers, and leadership. Ideally, these teams have experience and success in working with startups and marketing in an entrepreneurial capacity. The best projects in the industry boast a team with these qualities and then some.
As you evaluate the team of a project you’re considering, don’t take information for granted. Dig into the details and gather as much information as possible. Check out Twitter feeds, LinkedIn profiles, and Facebook pages, to learn what you can before investing in a project. Doing so gives you a better idea of how committed the team is to the product they’re developing.
Beyond the team itself, it’s imperative that the project has the capability to market itself. This means developing partnerships, finding sponsors, and earning the support of significant players within the industry. A solid marketing plan is almost as important as the product itself. That’s why it’s important to strike a balance between the development of the product and marketing it to the rest of the world.
Without a solid marketing strategy, a project may fizzle out and dry up over time. On the other hand, a marketing plan that causes too much hype, or gets too far in front of the product can cause concern for the public and wind up crashing the project. Ideally, you’ll find a project that pairs development and marketing organically, which leads to natural growth and scaling as the project gains traction.
The amount of time a project is taking, or will take, is an indication of how well the team is hitting targets and objectives. The best projects need to deliver. If they can’t, investors gets worried, which results in a drop in valuation. A team that is trustworthy will keep its supporters in the loop, letting them know when to expect goals to be met, or providing legitimate reasons why a target needs to move.
You also want to find a project with a reasonable timeline. A team missing targets can cause issues, however, a team with an absurd timeline puts itself at the mercy of the market. As a result, they could find themselves out of the race before they even get a chance to get started. Find a project with a reasonable balance between speed and completing tasks correctly.
Find the Right Platform for Your Investments
Many that are new to the world of cryptocurrency buy the most popular ones from Coinbase and store them there. There are many, many more projects available, along with a few different Coinbase alternatives. Find a platform that works for you and the projects you select. Cryptocurrency isn’t a one size fits all industry. Do your research, diversify, and enjoy!