04-26-2021, 08:14 AM
PSA: it’s nearly impossible to “diversify” within crypto
<!-- SC_OFF --><div class="md"><p>Seen some popular posts/ sentiment around here about how it’s important to hold lots of different coins for diversification! A big problem with that thesis - true diversification is the accumulation of assets who’s returns are not well correlated with one another, I.e stocks and bonds, growth stocks and value stocks, real estate, equities from different segments of e global economy etc. </p> <p>Crypto is a great way to diversify your portfolio if you hold lots of the other asset classes- but if you already hold a ton of crypto, buying different kinds of coins isn’t diversifying- you’re just exposing yourself to the same underlying market dynamics via multiple assets. </p> <p>The way I view altcoins is essentially as a way to expose yourself to more volatility within the crypto space- you are subject to the same market forces as BTC but with a much higher beta and therefore the potential for greater returns (or losses obviously).</p> <p>The same is obviously true for folks that want to hold crypto and then also invest in stocks that derive their value from crypto like coin base, Riot etc...</p> <p>Any who good luck and happy mooning!</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Kemba4Heisman"> /u/Kemba4Heisman </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mycne2/psa_its_nearly_impossible_to_diversify_within/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mycne2/psa_its_nearly_impossible_to_diversify_within/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>Seen some popular posts/ sentiment around here about how it’s important to hold lots of different coins for diversification! A big problem with that thesis - true diversification is the accumulation of assets who’s returns are not well correlated with one another, I.e stocks and bonds, growth stocks and value stocks, real estate, equities from different segments of e global economy etc. </p> <p>Crypto is a great way to diversify your portfolio if you hold lots of the other asset classes- but if you already hold a ton of crypto, buying different kinds of coins isn’t diversifying- you’re just exposing yourself to the same underlying market dynamics via multiple assets. </p> <p>The way I view altcoins is essentially as a way to expose yourself to more volatility within the crypto space- you are subject to the same market forces as BTC but with a much higher beta and therefore the potential for greater returns (or losses obviously).</p> <p>The same is obviously true for folks that want to hold crypto and then also invest in stocks that derive their value from crypto like coin base, Riot etc...</p> <p>Any who good luck and happy mooning!</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Kemba4Heisman"> /u/Kemba4Heisman </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mycne2/psa_its_nearly_impossible_to_diversify_within/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mycne2/psa_its_nearly_impossible_to_diversify_within/">[comments]</a></span>Kind Regards R