Diversification is a very popular term with any type of investment. As we can understand through the word itself that we need to have our investment diversify in multiple instruments because this way we can minimize the risk. There is a saying that never put all your eggs in one basket and it is one of the things that truly applies with the founder of diversification. Any experienced or smart investor will never put all his investment in one instrument but he will diversify it across various instruments and this is the best way to minimize the risk and maximize the profit. 

![image.png](https://images.hive.blog/DQmTQEiCsYszLfZ6YSQENGFELak9K7dH9hkdMwt62DcPpbj/image.png)

[src](https://images.app.goo.gl/tvut7tL1Y8uydwgYA)

This formula of diversification applies everywhere and crypto is not in exception so in crypto-asset diversification we need to understand that it is very important to invest in a couple of coins. There is no rule that we need to follow how we were based on our asset portfolio we can determine the percentages and choose a couple of coins to invest and it is one of the best strategies to follow with our crypto investment. No matter in which segment you are investing but we must follow asset diversification everywhere.


When it comes to the investment, we decide some amount that we want to invest from our savings or income and want to invest in some coins but we should never invest all the money in one coin instead we need to shortlist at least 3 to 4 points, and then investing money proportionately. We never know how much it will have even a top-performing project can lose this momentum because of any reason that we obviously can't put it so it is highly advised to keep our portfolio diversify so that one as it does not perform well then at least remaining ones will be able to cover the gap.


*For example, if I need to invest a hundred dollars in crypto then I will divide this amount in for part and choose for finance to invest in. The percentage between four coins can be different and I normally decide the percentage based on the coin value. So here I will distribute this hundred dollars between BitCoin, Ethererum, Solana, and Dot. I prefer to below diversification with my investment of $100 however you can go do as per your preference.*

Bitcoin = 30%
Ethererum = 30%
Solana = 20%
Dot= 20%


![image.png](https://images.hive.blog/DQmQQojVaLK3YWeLM6KMPimvMknoxqs377ny6aBGkBgEX7T/image.png)

[src](https://images.app.goo.gl/htmN9PuJw4BPmBRt9)

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**Benefits of Diversifying assets?**

We know that crypto is highly volatile so following diversification is very helpful.


* Helps to minimize risk with the investment
* If one coin crashes then also we don't get impacted with huge loss
* Safety from complete capital wipeout
* Every coin does not perform the same way so if one performs significantly we can earn great profit

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There is s saying that never put all your eggs in one basket and this completely applies to asset diversification. I follow the same with my investment and so far it has certainly helped me to minimize the losses. Be it crypto or any other segment and you never know when something goes wrong and that's where this diversification helps us to save money. Everything has its pros and cons but diversification has more of its positive sides than negative.

**Thank you so much**

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