The financial sector has recently welcomed its next step into evolution; Cryptocurrency. The new segment consists of virtual currencies that are almost impossible to duplicate or retract. Since its inception, the cryptocurrency sector has come a long way. It now has over 4000+ digital currencies under its belt and is most definitely the biggest asset class the world has ever encountered. Among all the coins available in the market, only the top 20 or so coins are considered most valuable at the moment and make up the majority of their total market value. This decade-old space has a lot of potential in-store and we are just getting started!
The potential of cryptocurrencies and the various application possibilities that it comes with have created a buzz within the cryptocurrency market in India. The escalating growth has helped etch the commodity as an asset that immediately elevates a portfolio. To make it simpler to understand, cryptocurrency has often been compared to real estate and digital gold besides being deemed as the biggest asset that one can include in one’s portfolio.
Also read: What is Cryptocurrency?
As we dive into the query – how to invest in cryptocurrency in India? let us take a quick look into the security measures one should be aware of before venturing into cryptocurrency investing.
If you are already familiar with or new to cryptocurrency investment, one of the smartest ways, as pointed out by various researchers, to invest is to diversify your portfolio. Keep that in mind, the most common question for new investors would be;
What is a portfolio?
A portfolio is a cumulative holding of one’s assets such as financial investments which include stocks, bonds, commodities, cash, and cash equivalents, such as closed-end funds and exchange-traded funds (ETFs). It is often believed that stocks and cash make up the whole portfolio, this is not true. A portfolio can also include real estate, cryptocurrency investments, and a wide range of other assets like art and other private investments.
Now that we have an idea of what a portfolio means, let us take a look at
Why should you diversify your investment portfolio?
Diversifying what you allocate within your portfolio is arguably the most important pillar one can add to one’s portfolio. Making the components diverse, one decreases the possibility of being struck with a major loss at a go. It helps balance out the total outcome of one’s various investments. Creating a balanced portfolio requires a choice of specific investment products such as stocks, bonds, commodities, real estate, cryptos, etc. to generate passive returns while protecting oneself against various market volatility.
Different types of investments tend to give different returns since the outcome is a result of various markets and how each of the markets functions. The very reason why having a diversified portfolio helps; as it equates out losses incurred from one asset with profits from another. Though this does not strike out the possibility of all the assets cumulatively making profits or incurring a loss.
Why should you diversify your crypto portfolio?
The main aim of making one’s cryptocurrency portfolio diverse remains the same as to why one should diversify one’s portfolio as a whole. While drawing a tentative conclusion regarding the crypto market is close to impossible, making a wise choice of investing in various cryptocurrencies and making a diversified crypto portfolio keeps it impact-ready.
The importance of cryptocurrency diversification is made evident as it reduces the risk of permanent loss, in a scenario where one of the assets within the crypto portfolio might crash but the other assets may be holding their value or experience an all-time high or a profit. All in all, the various assets together put the portfolio in a better place.
Diversifying crypto assets not only provides a safety net around the asset assortments but also helps in imparting knowledge about the various projects and upgrades happening within each blockchain technology. This helps the portfolio owner intake a lot of knowledge and thereby analyze which cryptocurrency to include next in the portfolio and which ones to hold even if the markets show frequent change. For example; most of the portfolios will contain Bitcoin, Ethereum, and other regularly mentioned or popular cryptocurrencies. Despite their popularity, there are several other coins one can invest in, depending on their various futuristic applications and how they have the potential to be the next best crypto.
The risk of investment concerning its expected or potential return
Top 10 Cryptocurrencies to Invest in 2021
| Cryptocurrencies | Price in USD |
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$58,120.22 |
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$388.92 |
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$4,066 |
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$1.75 |
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$663.96 |
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$1.56 |
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$0.5049 |
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$0.142 |
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$1,462.21 |
|
$305.40 |
*Price as of 11 May 2021.
4 types of cryptocurrencies to consider for a well-balanced portfolio:
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7 cryptocurrencies to include in your Crypto portfolio:
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For seasoned investors, diversification makes sense as a way of minimising risk and maximising the potential rewards for their portfolio. The same understanding stands true for crypto portfolios as well.
Diversifying your cryptocurrency portfolio holdings with assets that earn a passive income through a yield and assets that deliver value through an increase in price sums up to bigger gains over time. If one wants to get their portfolio more sophisticated, one should consider diversifying their holdings further by investing in different types of cryptocurrencies, different industries, different regions, and buying in over a longer period.
8 best Crypto portfolio tracker:
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*Source: Benzinga
The simplest Bitcoin investment app in India: CoinDCX.
In the cryptocurrency investment app for beginners, CoinDCX, new investors can use the app as an efficient crypto portfolio tracker by going to the ‘My Investment’ tab within their app. The beginner CoinDCX app allows retail investors to invest in the best-selected cryptocurrencies. One can also access a list of top cryptocurrencies on the app.
List of top cryptocurrencies on CoinDCX :
- Bitcoin
- Ethereum
- Bitcoin Cash
- Binance Coin
- Kusama
List of top cryptocurrencies: Top 7 cryptocurrencies or 2021
- Bitcoin
- Ethereum
- Tether
- Cardano
- Polkadot
- Ripple
- Uniswap
As a trend, most new users start their crypto investment journey with investments in established cryptocurrencies such as Bitcoin, Ethereum and etc.
One of the most compelling queries for a newbie in the cryptocurrency space is to understand How to invest in bitcoin.
