A crypto portfolio is very similar to a stock portfolio. In simple words, It is a basket of different crypto assets. Instead of investing in stocks or real estate, your money is invested in multiple digital assets to generate passive income. Of course, you can only stick to a single cryptocurrency however to avoid volatility risks it is recommended to invest in various crypto assets so that when one of the assets goes down you can still keep your crypto portfolio stable.
Before creating a crypto portfolio, asking some of these questions yourself might be a good idea. What are your financial goals? and How much risk can you handle? Once you have your honest answers then you can start to focus on creating a well-balanced crypto portfolio.
At first, it might sound confusing if you are new to the crypto market. But once you understand the basics of a crypto portfolio, you will see how easy it is. The first goal of the portfolio is to generate passive income steadily over time. So the portfolio should be managing the risks through diversification of the digital assets. There’s not just one strategy that works perfectly. You can use either one single strategy or multiple different strategies to reach your financial goals. If you don’t want to try existing strategies you can always create a unique strategy that suits your needs and goals. Let’s talk about some well-known and popular strategies preferred by many crypto investors.
Concentrated portfolio
You can create a concentrated portfolio by focusing on a few digital assets that may give you higher returns. However, if you are new to crypto assets, you will need some knowledge and a little bit of luck. This type of strategy holds higher risks. if you understand the basics of the crypto market and how it works, then this type of crypto portfolio can be more suitable for you.
Bear in mind that the possibility of higher returns is available here, however, as you will focus on certain protocols or ecosystems, your portfolio will be more vulnerable to high volatility waves on the crypto market.
Diversified portfolio
Affirming the old saying “Don’t put all your eggs in one basket”, a diversified portfolio is more focused on multiple ecosystems or different digital currencies. This strategy is a better approach when it comes to mitigating the market risk. You can weigh your portfolio on different ecosystems that may endure more unexpected market crushes or price drops.
Through a diversified portfolio, you can distribute all risks equally. Your portfolio may not grow as fast as the other ones, but you will have a balanced performance against negative price performance and risk. If you just started to invest in crypto, this portfolio might work for you better than other existing strategies.
HODL
Hodl stands for “hold on for dear life”, which means you establish your portfolio and don’t touch it for a long time even though you lose the money, you should stick to your guns and don’t sell your assets until you get your expected returns in the future.
Buying the Dip
As you can guess from the name, this strategy is used by generally short-term investors. You buy the coin when the price is at the lowest and stick to it until the price goes up then, you can get higher returns on it. Imagine that in 2013, if you bought only 1 BTC for 13.30$ and didn’t touch it until today, you would have 97,688.98$, equivalent to 1 BTC in 2025.
Creating a well-balanced portfolio is a must for the efficiency of your future returns. Also, it is important to have a solid base for the future. Let’s say you want to create a diversified portfolio with a unique strategy. Here are some steps that you can start with:
Crypto Market Analysis
The crypto market is still young and volatile, so it is a good idea to do detailed research about ecosystems, blockchains and the companies behind the systems will give you insights about the coin that you want to invest in. Learn about different types of coins such as payment currencies or stablecoins. Once you understand the advantages and disadvantages of different coins you can choose the right ones for your crypto portfolio.
Figure out your financial goals
Determination of future goals will help you to choose the right cryptocurrencies for your portfolio. If your goals are more short-term and you are open to higher risks, then you can go for bigger but more volatile coins. However, if you are planning to invest for the long term, it will be a good idea to focus on more established coins such as Tether (USDT) and USD Coin (USDC).
Starting from more established crypto assets will teach you to handle higher risks in the long term.
Diversify your portfolio with different digital assets
As mentioned before, crypto portfolios don’t only include digital coins. There are different digital assets available on the market. Protocols for fintech, gaming, and NFTs might be alternative options to diversify your portfolio.
Update and rebalance regularly
The crypto market is quite volatile, so it is important to rebalance your portfolio according to market updates regularly. For example, every three months, check your portfolio and redistribute your investment according to changes in the market. This will ensure that your portfolio keeps the balance even if the market fluctuates.
So if you feel that a crypto portfolio is a good investment tool for you, then the next step is to open a crypto account where you can store your digital assets and create your portfolio. You will need to prefer a platform that supports crypto trading and storage.
