How to Build a Profitable Crypto Portfolio

CryptoGlobally
7 min readJul 8, 2022
build a crypto portfolio, crypto portfolio management, portfolio allocation, crypto investing strategies, diversify cryptocurrency portfolio

Do you want to Build a Crypto Portfolio in 2022? Don’t worry, today I will reveal my Best Crypto Investing Strategies that Beginners can follow to make huge profits and passive income, even in the Bear Market. We are going to look beyond Bitcoin and Ethereum. I am going to talk about advanced crypto portfolio management. This is premium knowledge, but it’s free for you.

What is a Crypto Portfolio?

A crypto portfolio is a cryptocurrency collection owned by traders and investors. Portfolios typically include a variety of assets, including altcoins and crypto financial instruments. It is very similar to a traditional investment portfolio, except that it is tied to one asset class. You can manually track your assets using a spreadsheet or use specialized tools and software to calculate your assets and returns. A good portfolio tracker can help. Trackers are essential for intraday traders and other short-term traders, but they are also valuable to long-term investors and holders.

How do I Create Best Crypto Portfolio?

Crypto Portfolio Management in 7 Easy Steps

  1. Risk Management
  2. Number of Coins in your Portfolio
  3. Type of Coins
  4. Diversify Crypto Portfolio
  5. Best Crypto Portfolio Allocation
  6. Passive income
  7. Best High reward coins

1. Risk Management-Crypto Portfolio Management

This is an Important Point if you want to build a Crypto Portfolio Successfully. Every person’s risk-taking ability is unique, so how can you figure it out? Don’t worry, I am going to reveal how you can manage your risk in 3 Simple Steps.

1. The First Step has to decide whether you are a Low risk/reward investor Medium risk/reward investor or a High risk/reward investor. Decide and go to the second step.

2. I recommend you divide your portfolio into 3 Parts

  • The first part of your portfolio should be in Strong fundamental coins.
  • The second part of your portfolio is for medium risk/reward coins.
  • The Third part of your portfolio is for High risk/reward coins.

3. In The Third Step I suggest ‌you should:

  • Allocate 50% of your portfolio to Strong fundamental coins.
  • 30% of your portfolio should be in medium risk/reward coins.
  • 10% of your portfolio is in High risk/reward coins.
  • 10% of your portfolio should be in stable coins (which is important for buying the dip).

2. Number of Coins in your portfolio?

How many Coins should I own in my portfolio?

You should own coins according to your portfolio level, which is shown below. This is the best Strategy to build a Crypto Portfolio.

  • Tiny investor- if your portfolio size is less than 3k, you can invest in 3–4 coins.
  • Small investor- if your portfolio size is less than 10k, you can invest in 5–6 coins.
  • Medium Investor- if your portfolio size is more than 20k, you can invest in 8–9 coins.
  • Big investor- if your portfolio size is more than 50k, you can invest in 12–15 coins.
  • I have seen many small investors have 25–30 coins in their portfolios. Don’t make this Mistake Otherwise you can’t beat even Bitcoin returns.
  • Consolidated Portfolio will give you higher returns rather than diversifying (for high-risk takers). Diversifying your portfolio will protect you.
  • Buy a few fundamental coins on the dip and hold and take profit on time.

3. Type of Coins in your portfolio?

Which type of Cryptocurrency should I own?

There are several types of cryptocurrency on the market that we need to identify in terms of our risk potential. I recommend you should carry Bitcoin and Ethereum into your core portfolio.

Let’s have a look at the different ‌cryptocurrencies to invest in according to risk factors. I have divided it into 3 parts.

  • Low-Risk Cryptocurrency- Bitcoin, Ethereum (which is a strong fundamental coin)
  • Medium-Risk Cryptocurrency- Top 20 coins by market cap (large-cap altcoin)
  • High-Risk Cryptocurrency- Under 100–350 rank by the Market cap.

I don’t invest in coins that are below rank 350 until I believe in coins fundamentals. Also, I don’t invest in meme coins. I will not recommend you to invest in meme coins. Because it is not a worthy investment in the long term.

You can check Cryptocurrency rank by market cap at Coinmarketcap.com.

4. Diversify Crypto Portfolio

Diversifying your portfolio is the most important part of investing in any market because it will reduce our risk. Remember, crypto is always risky, so adding different ‌projects to our portfolio will give us advantages to minimize our risk when we build a balanced portfolio. Don’t invest all your money in a single coin or project.

We will use an advanced method of diversifying our portfolio, we will diversify our portfolio in different sectors of crypto, for example, In the NFT project, Metaverse Project, L1, L2, etc.

5. Best Crypto Portfolio Allocation — Advanced

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Allocating our portfolio to different sectors is very important. This is called advanced diversifying. At the same time, this is a fast innovating space so we need to consider various sectors.

Top 10 Important sectors of Crypto we need to consider while adding coins to our portfolio.

  1. Layer 1 Blockchain (L1)
  2. Layer 2 solution (L2)
  3. Exchanges (DEX’S and CEX’S)
  4. Web3
  5. Payment
  6. Metaverse
  7. NFT
  8. Interoperability
  9. Privacy coin (optional)
  10. Stablecoin

1. Layer 1 Blockchain (L1)

Bitcoin and Ethereum you should carry in your portfolio, which are strong fundamental coins. There are some fundamental L1 coins based on your risk profile you can add to your portfolio.

  • Low-Risk coin — Bitcoin, Ethereum, BNB
  • Medium risk/Reward coin — Cardano, Polkadot, Solana
  • High risk/Reward coin — EGLD, KSM, Near

2. Layer 2 solution (L2)

We face scalability issues when many people use core L1 like ETH. so the Price of gas fee of ETH will increase and transaction speed will reduce. That’s why we need L2 solutions. There are some strong L2 coins we can add to our portfolio.

  • Low-Risk coin — Matic, SYS
  • High risk/Reward coin — Metis, Dusk, CTSI

Check- Why is Metis Dao Better than Polygon Matic? (Vitalik’s Mother is a part of the Metis dao team)

3. Exchanges (DEX and CEX’S)

There are Some Centralize and decentralized Exchanges coins we should add to our portfolio based on our risk profile.

  • Centralized Exchange coins — FTT, BNB, CRO
  • Decentralized Exchanges coins — Cake, Boo, INJ

4. Web3

Everyone is Taking about Web3. Even Elon Musk is talking about web3. People and I also think web3 is the future of the Internet. We should add web3 based project to our Portfolio.

  • Low risk/Reward Coin — Polkadot, ChainLink
  • High risk/Reward coin — Ocean, Rad, PRQ, Bat

5. Payment

As we know, we can pay globally in crypto without delay and restriction. Crypto Payments have the potential to create a finite and global economy. We should have exposure to payment-based projects.

6. Metaverse

This is the topic that everyone knows about it. It has recently boomed after Facebook announced they are going into the Metaverse. There are some Metaverse Gaming projects we should have exposure to.

  • Medium risk/reward coins — Mana, Sand, AXS, illuvium
  • High risk/ reward coin — Pyr, VRA, Star Atlas

7. NFT

It has the huge potential to solve the ownership problem. While crypto is risky, then NFT is super risky. Most of the NFT projects will not survive. We need to be extra conscious while investing in NFT.

No doubt it can give you higher returns. Play to earn NFT Projects we can consider adding to our portfolio.

8. Interoperability

The future will be many chains, and interoperability between chains will be crucial. We already see that with many projects and bridges to come. It will be a hot sector to look at.

  • Medium risk-reward coins — Polkadot, Atom
  • High risk-reward coins — Rune, Multi

9. Privacy coin (optional)

These are the coins that can’t be tracked. It is known for private transactions. Personally, I don’t invest in privacy coins, but you can invest according to your research and risk profile. This is something you have to know about it.

10. Stablecoin

You can’t predict a crash in the market. That way we should carry 10% of our portfolio in stablecoins. So we can buy coins during the market crash.

6. Passive income

Do you want to earn passive income from your cryptocurrency portfolio? However, the market always has bulls and bears time, but the important thing is to make sure your portfolio is constantly growing.

Staking and yield farming is a way that you can earn passive income from your portfolio. It can be very helpful in protecting your portfolio during bear markets, it has some risks and you must understand them well.

7. Best High reward coins

9 best Coins to buy now for higher returns (NFA)

There are some must-have good fundamental coins by sectors I invested in for the long term & for getting higher returns. Do your research on these projects before investing.

1) FTT 2) EGLD 3) RUNE 4) OCEAN 5) COTI 6) METIS 7) BOO 8) SYS 9) POLKADOT

How much of your portfolio should be crypto?

We should consider Cryptocurrencies as a high-risk asset class in your portfolio, and many experts say they should not exceed 5%-10% of your portfolio. The value of Bitcoin and all cryptocurrencies can fluctuate significantly over the course of a day or even an hour, so you should familiarize yourself with the volatility and uncertainty that come with it.

Conclusion

Congratulation now you are under the list of the top 10%. Whose who follow these steps will sure definitely not going to lose money in the market in the long run. These are some steps that no one tells you when you build a cryptocurrency portfolio. Don’t forget to read important tips.

The coins I suggested in my article are good fundamental projects. You need to research yourself before investing in any projects.

You can share these Secrets with your friends and family by sharing this article. Protect them before losing money.

Originally published at https://cryptoglobally.com on August 18, 2022.

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