Beyond Bitcoin: Altcoins To Look Out For When Diversifying Your Crypto Portfolio
While BTC and ETH should definitely enjoy 80 per cent of your crypto portfolio, diversifying into altcoins is prudent.
The allure of ‘crypto stalwarts’ like Bitcoin (BTC) and Ethereum (ETH) is undeniable, when it comes to investing in crypto assets. Yet, confining one's investments to these giants is akin to overlooking the vibrant opportunities that the broader crypto market presents.
Diversification in crypto is a proactive strategy to capitalise on the diverse technological advancements and emerging market trends. For savvy investors eager to harness the full potential of their portfolios, going beyond BTC and ETH is essential. Let us see how expanding your investment horizons can not only safeguard your assets but also significantly enhance your returns.
Rationale and capital allocation
In traditional investments, diversification might mean spreading your capital across different asset classes like equities, bonds, and real estate. In the crypto world, there are numerous promising narratives that offer substantial growth. It is also about strategically placing your bets on high-conviction opportunities. Imagine you are investing in the top 50 companies in India. This will ensure that you grow at an average rate. If you want to beat the benchmark, we need to have some part of the capital invested in a handful of assets that perform better than average. This is where diversification comes into play.
While BTC and ETH should definitely enjoy 80 per cent of your crypto portfolio, diversifying into altcoins is prudent. Out of the remaining 20 per cent, half can be allocated to the top 10 crypto assets and others to strategic bets such as RNDR, JUP or even memecoins.
Narratives to track
The year 2024 has seen several emerging narratives in the crypto space that offer exciting opportunities for those willing to explore beyond the mainstream. Here are some of them worth noting:
AI and Blockchain: RNDR and FET
AI has taken the world by storm and the crypto world is no different. Two major assets making waves in this space are Render (RNDR) and Fetch.ai (FET).
RNDR is pioneering the use of a decentralised GPU network for AI services, presenting a unique convergence of blockchain and AI technologies. With its current valuation and the growing demand for AI services, RNDR shows potential for substantial growth.
Fetch.ai (FET) operates within the AI blockchain domain, facilitating autonomous agent systems for various services. Its robust platform and innovative use case in decentralised AI services position it as a promising asset for growth. FET showed resilience during the bear markets.
DePIN or Decentralised Physical Infrastructure Networks: Arweave (AR)
Arweave (AR) is making significant strides in the decentralised data storage arena. Backed by major industry players and with a technology that has seen rapid adoption, AR is positioned for potential exponential growth, reflecting its solid foundation and market demand. This is a medium-risk asset which could bring considerable returns.
Real World Assets (RWAs): PENDLE and RIO
RWAs are essentially a link between real-world assets and the crypto world. In this space, Pendle offers an innovative approach to DeFi, enabling the trading of future yield streams or tradable tokens.
Realio Network (RIO) offers a promising blend of traditional asset security and blockchain innovation. Its recent performance and strategic partnerships suggest strong growth potential. Essentially, RIO allows users to create new assets in a secure and decentralised process.
Solana’s Ecosystem Innovations: Jupiter and Dogwifhat
Jupiter (JUP) enhances Solana’s offering by optimising liquidity aggregation, similar to Uniswap for Ethereum, but with potentially faster and cheaper transactions. This highlights the scalability of Solana. Dogwifhat (WIF), a memecoin within the Solana ecosystem, captures the lighter side of crypto investments while offering substantial growth during market uptrends. WIF is expected to rally well if Solana’s memecoin ecosystem thrives.
Navigating the future
Investing in these emerging narratives requires a blend of enthusiasm for new technologies and a cautious approach to risk management. Each of these assets carries its own set of risks and opportunities, and thorough research on the investors’ side is vital. It is also advisable to get in touch with exchanges for professional advice.
As we continue to witness the evolution of this market, staying informed and agile will be key to achieving long-term success in your crypto investment journey.
(The author is the CEO of Giottus Crypto Platform)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
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