As a beginner in crypto, it is understandable if you feel scared about the prospect of investing in the space. People say a lot of good things about crypto, but there are a lot of naysayers as well.
But, we’ve seen that a lot of people remain committed to investing in crypto even though they understand the risks. As a newbie, it is only right that you get some guidance along the way so you don't make mistakes. Below, we’ll look into some of the coins that can constitute your portfolio.
How to Balance Your Crypto Portfolio
Before we begin, it’s worth noting that the coins displayed below are simply opinions. You can decide to go with them, or you could decide to try something new for yourself. The tips and suggestions here are simply based on research.
When it comes to balancing your crypto portfolio, the most important thing is… well… balance. Cryptocurrencies come in different types and forms - some have specific use cases, while others don’t. None of them is particularly bad - Bitcoin has a specific use case, and its price has been rising. Dogecoin doesn't have a specific use case, but it’s also been seeing price gains.
At the end of the day, you want to have a portfolio of both. You have assets with use cases that can minimize your risk profile, and you want something that is a bit risky because those outsized gains will eventually come.
It is always recommended that you hold different coins. This way, you’re sure that your risk will be properly covered and spread around. When finding an asset with a use case, think about what that use case is and whether you see a future in it or not. Below, we’ll list some coins that you should feel confident about when adding to your portfolio:
Without a doubt, Bitcoin is always a welcome addition to your portfolio. Bitcoin is the most popular and widely used cryptocurrency available, and this means that it has the most visibility. When the market rally starts, Bitcoin tends to lead the charge - and vice versa.
The only caveat to Bitcoin is that it might not deliver the same type of daily returns it used to. Unless you can buy a huge amount of it, you might not get big gains daily. But, if you can commit to Bitcoin in the long haul, you can definitely make money. That has been proven time and again.
XRP has always been a controversial asset, but there is a great deal of promise for it. To date, no asset is better suited for making cross-border payments than XRP. The coin is quick, simple, and effective. Also, it is very cheap to own for now.
Currently, the Securities and Exchange Commission (SEC) is in the midst of a legal case with XRP’s developers, Ripple Labs. Even despite the case, XRP’s price managed to break the $1 mark for the first time in years. Ripple Labs has so far scored several wins in the case, and there is legitimate hope that they could come out victorious. If this happens, XRP’s price will explode.
DOT is the native token for Polkadot - one of the most promising blockchain platforms available. Polkadot functions via an intuitive mechanism that helps it achieve the blockchain trifecta - speed, decentralization, and scalability. With the demand for blockchains getting high,r projects like Polkadot definitely have a future.
As expected, this is another of those assets that have a lot of use cases. DOT is also relatively cheap, and it has shown an ability to give huge gains over time.
If you’re feeling a bit risky, DOGE is an asset you should get. This coin doesn't necessarily have a use case, but it is still one of the most popular cryptocurrencies.
Primarily, Dogecoin’s value comes from its community. There are hundreds of thousands of people who love the coin and want to see it become the most valuable cryptocurrency. Of course, this doesn’t mean that Dogecoin isn’t useful. Some have asked for it to be included as a payment option for Tesla vehicles since Elon Musk is such a fan of it. But, most people are just in it for the huge gains.
When it comes to blockchains, you should know one thing - they don’t run on their own. Thanks to their infrastructure, blockchains need sources that provide off-chain data. This is what a blockchain oracle does - and no blockchain oracle is as big as Chainlink.
Chainlink is especially important as more projects in the decentralized finance (DeFi) space are being built. Protocols need a lot of data, and Chainlink will be there to supply them. So, there are a lot of incentives to buy LINK - Chainlink’s native token.
Again, it is important to keep in mind that these are simply opinions. It is always recommended that you do your research to find the right coins to pick for you.