How to build well-balanced crypto portfolio?

A balanced crypto portfolio is the one where risk and return levels suit an investor since everyone has a different risk tolerance and expectations of profit.

What are different types of portfolios?

Just like traditional portfolios, all crypto portfolios can be divided into three main groups:

Conservative

This type of portfolio is mainly aimed at preserving your capital but can still generate a moderately high return. It contains low-risk crypto assets such as well-known tokens with a high market capitalization (Bitcoin, Ethereum, Cardano, etc.).

Aggressive

This portfolio includes fast-growing cryptocurrencies such as meme tokens (Shiba Inu, Catecoin, Duckie Land, etc.) or native coins of blockchain-based games or social projects (Hive, Steem, Aave, etc.). These are high-risk assets that can unexpectedly surge in price and bring hefty gains.

Moderate

This type of portfolio combines conservative and high-risk assets, which makes it a medium-risk investment. However, this also means that your profits will be moderate.

Conclusion

So, to create a balanced crypto portfolio, you should first set your investment targets and determine acceptable risk levels. Most investors prefer to get the right balance and opt for a moderate portfolio type which implies asset diversification. This strategy allows investors to significantly reduce risks which is considered the main feature of a balanced portfolio. Meanwhile, the aggressive type is the least balanced portfolio as it can magnify both profits and losses.