Steemit Crypto Academy | Week3 : Designing a Cryptocurrency Investment portfolio

3개월 전

Though Cryptocurrencies are still in their development stage, they have proven to be one of the potential and highly profitable investment opportunities that have turned many individuals into millionaires and billionaires. Many companies have made huge and significant investments in Cryptocurrencies over the years, take for instance the most recent investment of $1.5billion in Bitcoin by Tesla that happened in February this year. This literally implies that Cryptocurrencies are a great potential investment opportunity gaining traction every other day.

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Background image:Pixabay

A variety of Cryptocurrency types have mushroomed over the years since their conception in 2009 following the innovation and success story of Bitcoin. You may be having a desire to take a bold step and invest in a variety of Cryptocurrencies after learning of the financial revolution it has caused in the lives of very many people out there.
This may be on your mind; I want to invest in Cryptocurrencies but what Cryptocurrencies can I really invest in? This is what ushers in the idea of designing a Cryptocurrency Investment portfolio.

A Cryptocurrency Investment portfolio is simply a list of Cryptocurrencies that you have invested in. This is designed after making thorough research on the different Cryptocurrencies by subjecting every one of them to fundamental analysis to find out whether they are viable and worth your investments.


Reasons for designing a Cryptocurrency investment portfolio


For risk management
It’s important to note Cryptocurrency investment is a highly risky venture. What is a risk?
A risk is simply any profitable undertaking that people get involved in and may result in profits for success or losses for failure. Investing in Cryptocurrencies exposes you to 2 major risks;

  • The Crypto market risk;
    Bitcoin correlates to other Cryptocurrencies. Literally meaning, whatever happens to Bitcoin it also affects other Cryptocurrencies. When the Bitcoin price increases, other cryptocurrencies follow suit and when it declines in price, other Cryptocurrencies also decline in their price value.

  • The Crypto specific risk; can be in form of network failure of a given crypto project, acts of fraud in a given crypto project, for example, the project owners stealing the investors' funds. These can be combated through the diversification of your Crypto portfolio.

Maximizing your gains from the highly bullish coins that are on your portfolio
Keeping other factors constant, different coins fluctuate differently in the Crypto market. When you have a diversified Crypto portfolio, it enables you to earn huge profits when such coins increase in value with relatively bigger percentages. For example, an Altcoin can increase by 100% while a major coin such as Bitcoin may have increased by 5%. Therefore such a huge price increment of Altcoins makes your portfolio grow over time.

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Image source:Unsplash


Factors to consider when designing your Cryptocurrency investment portfolio.


The prevailing Crypto Market situation
There are 2 Crypto market conditions that affect someone’s investment decision. It’s therefore important to know the best time to buy a Cryptocurrency. Investors buy in the bear market condition. In other words, they buy in times when the Cryptocurrencies have declined in value. They hold their position and grow their investment portfolio when the crypto prices increase in value.

For example towards the end of this week, we have experienced a huge Crypto market dip. Bitcoin declined in price value from over 60k to around 48k and even other coins followed suit. Wise investors are now buying in and securing up positions in the current bear market.

Investing and Trading

Before considering investing in any of the Cryptocurrencies, investors to do enough research study on the different Cryptocurrencies. Crypto is highly rewarding, but also a highly risky venture. You can lose all your life savings if you blindly invest in it. Take for instance some investors that have fallen into traps of scams and fraud Crypto projects that eventually closed and vanished with their life savings.

Investors do fundamental analysis on the different crypto projects before considering investing in them. This is done to find out whether a particular Cryptocurrency is viable and worth their investment. This entails checking out the technical whitepaper, finding out the size of the community of a particular Crypto project. These deal in a particular
Cryptocurrency on a long term basis.

On the other hand, traders employ technical analysis, in order to forecast the future prices of some particular coins of their interest. It entails reading candlestick charts, using indicators such as the moving averages and so on. This is usually done on a short term basis while taking advantage of the high volatility in the Crypto markets.

Personal expertise

Invest in Cryptocurrencies that you are well knowledgeable about. For example, I normally invest in Steem by buying and powering it up on Steemit.com because I have good knowledge about it. You should never invest in a Cryptocurrency that you do not know about. Otherwise, you might fall victim to scam coins. You are supposed to do enough research about a particular coin before considering investing in it. If you are an expert who is well knowledgeable about a particular coin then go ahead and add it to your investment portfolio.

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Image source:Pixabay

A balanced Cryptocurrency investment portfolio

In order to manage the Cryptocurrency investment risk, you have to ensure that your Cryptocurrency investment portfolio is well balanced. Your portfolio should at least include the following Cryptocurrencies

2 major Cryptocurrencies such as;

  • Bitcoin
    Bitcoin is known as the grand-daddy of all other coins. It’s a highly popular Cryptocurrency and highly demanded. Having it on your Cryptocurrency investment portfolio narrows down the risk of losing your funds to other less popular and low demanded coins. Bitcoin’s high demand is attributed to the fact that for one to purchase other Altcoins; he/she has to first purchase Bitcoins.

  • Ethereum
    Ethereum is another major Cryptocurrency. It’s well known for smart contracts. The Ethereum blockchain has so many developments and projects built on it. These are gradually increasing its price value due to the ever-increasing demand for Ethereum.

Passive income coins
You will also want to diversify your Crypto portfolio by including a passive income Cryptocurrency such as Steem, TRX, etc. Passive income coins reward investors for holding/staking those coins. This is something great that can help you manage the Crypto investment risk through earning some coins from the included passive income coins in your portfolio. The rewards earned can at some point be used to cover up any losses made from other Cryptocurrencies in your portfolio.

Stable coins
A well balanced Cryptocurrency investment portfolio should also include a stable coin. This helps out in emergency times when you need some cash to cater for your daily life needs. You will also need some money reserved in a stable coin for purposes of buying some Cryptocurrencies during the bear Crypto market conditions.

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Image source:Unsplush

A Cryptocurrency portfolio tracker.

There are some good Crypto portfolio trackers that can help you in tracking the various Cryptocurrency assets in your portfolio. Research has it, that the best Crypto portfolio should have up to 20 assets. It can be so challenging in tracking all those 20 Crypto assets. With a Crypto portfolio tracker, it makes it easy to keep up to date with the various information and statistics about the performance of the crypto assets in your portfolio. Some of the best Crypto portfolio trackers include Blockfolio, Delta, Coin Stats app, Bituniverse, etc.

Inconclusion, a well designed and balanced Cryptocurrency investment portfolio is a must-have for anyone wishing to invest and succeed in the highly profitable Crypto market.

Homework task

Using an initial investment of $50, practically design your own cryptocurrency investment portfolio.

  • Your Crypto portfolio should have 6 Cryptocurrencies and briefly explain why you have chosen to invest in each one of them.
  • Use a Crypto wallet of your choice to hold your 6 cryptocurrencies.
  • Wait for a day or 2days, then showcase the final results of your investment portfolio.
  • Use proper screenshots to showcase before and after. Is your total crypto portfolio in profits or losses? Which cryptocurrencies have increased in value and made you some profits? And which ones have declined in price value and made you some losses? Or have all of them made you profits? What’s the growth percentage of your Crypto trading portfolio after the 1 or 2days waiting period?

Rules and Guidelines

  • Post your homework article in the steemit Crypto Academy
  • Only steemexclusive articles will be curated
  • Your article should range between 300 – 1000words.
  • Use an exclusive tag #yohan2on-s2week3 and also tag me @yohan2on so that I can easily find your article.
  • Clearly reference your work in case you have directly borrowed any content from other sources. Otherwise, be original and as creative as possible.
  • Plagiarism and spinning of other users’ articles will not be tolerated in the homework task. Otherwise repeat offenders will be blacklisted and banned from the Crypto Academy.
  • Use only copy-right free images and showcase their source.
  • To participate in this task, your reputation should not be less than 50.
  • This homework task runs till 1st/05/2021, Time: 11:59 pm UTC.
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Well explained, I have learned much from this lesson. Thanks a lot Prof @yohan2on.

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Another great lecture that has practical application.

I want to know if I can start with 200$ or more as starting capital or I have to start with 50$ only.

Thanks

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$50 is the minimum. Yes, you can go ahead and use $200 if you want and are able to afford it.

Thanks too for your concern.

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Respect Professor,

I have bought 6 coins few hours ago to setup my portfolio for this task.

I want to ask, should I sell them after 1,2 days to make those after pictures? Or I can just make those screenshots without selling them and showing the current value and mention difference in value from my buying points.

Thanks

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Don't sell them off after 1 or 2days waiting period. I want you to share with me the screenshots showing the difference in your Cryptocurrency portfolio from the point you bought them and held them in your wallet and the other point after being subjected to the flactuations in the crypto market.

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Got it. Will do the same.

Thanks for quick response as always.

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It's USD, right, Professor? What if I don't have any USD, can I use IDR instead with the equal amount? Today 1 USD is about 14,000 IDR. So 50 USD will make 700,000 IDR.

Really informative post I learned many new things I will post homework I'll show my portfolio

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Thanks for the appreciation, I am looking forward to it.

Buenas tardes profesor @yohan2on los 50$ tienen que ser reales o pueden ser virtual por favor si me puede aclarar esa duda.

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Hi @adriancabrera
You can use either virtual or the real $50.

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Perfecto profesor muchas gracias 👍

hi @yohan2on very good homework teacher congratulations I'm going to do this homework.

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Thanks and good luck. I am looking forward to it.

Great lecture Sir @yohan2on
I learnt many new things here.
Hope I can use a virtual portfolio?

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It's okay! You can go ahead and use that one. I am more interested in your understanding which you will have to show me in screenshots.

Profesor @yohan2on mi tarea de la primera semana de la segunda temporada aún no me la curan y quisiera que me diera respuesta porfavor
Aquí mi link
https://steemit.com/hive-108451/@derlis13/steemit-crypto-academy-or-temporada-2-altcoins-parte-1-mirando-mas-alla-del-bitcoin-binance-coin-bnb-yohan2on

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Reviewed and curated.

Hi prof , I have a query regarding the homework task.

Using an initial investment of $50, practically design your own cryptocurrency investment portfolio.

Do I have to design a new portfolio of $50 for this. Or I can use my earlier portfolio in which I have already invested more than $50. I mean, I have already invested in some coins, whose investment is more than $50. So can I use that portfolio?

Thank You

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You need to use a new one so that to avoid the confusion in the results.

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Ya Sure!

Thank You

Wow i have learnt alot about cryptocurrency from this thank you

А это уже интересный урок!
Возможно попробую!

Although my capital is small, I wanted to try this task since yesterday, I confess I'm afraid hahaha, it has been exciting experience, tomorrow I will deliver my homework with the result and I'm almost sure I will apply this more often! Tomorrow I will hand it in.

quiero participar, pero mi lvl de reputacion no es de 50, pero ya participado en tareas y me calificado :(

Profesor debido a la situación de mi país pude invertir 20$ en 2 monedas que me dice puedo participar

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Provided you can distribute that in all the 6 Cryptocurrencies. I suggest you create a virtual portfolio using etoro. There you will be able to use a relatively bigger initial investment value.

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Hello, professor, I want to know, if I can participate in the task, having a 46 reputation, but later I participated and received my qualification and vote from the curator2, I want to participate but I do not know if my work is valued, I really want to participate but I felt something of I reject those of us who are not lvl 50 in reputation, so I take the trouble to ask if I can participate or should I raise my reputation to lvl 50 in order to be taken into account and participate in the tasks of the academy?

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Sorry, you can't participate for now when your reputation is still below 50. It's the new rule that ought to be carefully observed. You will need to first grow your reputation to at least 50 in order to continue participating in the Steemit Crypto Academy.

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It's okay teacher, so be it, thanks for answering, we'll see you soon, at the academy

https://steemit.com/hive-108451/@dilbilgici/crypto-academy-week-9-homework-post-for-yohan2on-or-season-2-altcoins-part1-or-binance-coin-bnb

This was my homework task which you didn't check since 18 days. I'm asking me what the problem is? This is the second time that you didn't check my task. Do you have a problem with me ? Or with my nationality ?

Hello and thank you for this lesson. I have had great joy creating my new Yohan2On Portfolio (that is the name of it). I am curious to see how it will progress in the coming months. It has had an increase in value of about 4% since its creation. You can find the homework here: https://steemit.com/hive-108451/@unbiasedwriter/steemit-crypto-academy-or-season-2-week-3-or-home-work-post-for-yohan2on-a-new-crypto-portfolio

Wow. This is a wonderful class.

Screenshot_20210429-221431_1.pngMy homework link here

R hello Sir I have a question and that is can we invest more than $50 for this homework or we will have to stick with $50

I want to invest more than $50 and build a portfolio with $60 at least Sir can I do that or I will have to build it with $50 as you said need your answer

Thank you so much for the lecture

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You can go ahead and use $60, if you can afford it.

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Hi @yohan2on, this is my homework for this week. It took me two more days to post it due to some connection problems at home.

Best Regards

https://steemit.com/hive-108451/@allbert/crypto-academy-week-11-homework-post-for-yohan2on-designing-a-cryptocurrency-investment-portfolio

Hello @yohan2on, I have finished my homework, see it here.

https://steemit.com/hive-108451/@dilbilgici/crypto-academy-week-9-homework-post-for-yohan2on-or-season-2-altcoins-part1-or-binance-coin-bnb

This was my homework task which you didn't check since 18 days. I'm asking me what the problem is? This is the second time that you didn't check my task. Do you have a problem with me ? Or with my nationality ?