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Crypto asset diversification as a trading strategy – Part II by lupafilotaxia

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· @lupafilotaxia ·
$69.13
Crypto asset diversification as a trading strategy – Part II
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<center><img src="https://i.postimg.cc/05Crp9dB/Estrategias-de-diversificaci-n-de-activos-criptogr-ficos-12.png"/></center>
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<div class="text-justify"><h3>Introduction</h3></div>
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<div class="text-justify">The diversification of crypto assets is not a new strategy in itself, as its operating principle comes from classic or traditional financial economic models, the main objective of which is to give greater optimisation to our investments.</div>
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<div class="text-justify">Therefore, crypto asset diversification essentially aims to maximise the risk-adjusted returns of the portfolio by incorporating a multiple or varied investment strategy.</div>
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<div class="text-justify">The ecosystem of crypto asset diversification gives us the certain possibility to properly manage the portfolio and ensure a success story, as by formulating a multiple or varied investment policy.</div>
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<div class="text-justify">This varied investment policy in more than one cryptocurrency by executing diversification strategies increases the security of our investment, and thus decreases the risk of financial loss.</div>
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<center><img src="https://www.investingstockonline.com/asoglewh/2021/06/diversification.jpg"/></center>
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<td><center><a href="https://www.investingstockonline.com/es/5-trucos-para-diversificar-la-cartera-de-operaciones/" rel="noopener" title="This link will take you away from steemit.com"><strong>Source: </strong> InvestingstockOnline</a></center></div></td>
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<div class="text-justify">The diversification of crypto assets consists of investing in more than one cryptocurrency by executing varied investment strategies, i.e. investing by dividing our capital into multiple parts, which allows us to buy more than one crypto asset at the same time, in order to be able to successfully avoid the prevailing volatility in the cryptocurrency market.</div>
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<div class="text-justify"> Successfully navigating the ongoing challenge in the face of volatility in the cryptocurrency market involves devising more assertive investment strategies, including a) Analysis, and b) The 1-4 rule.</div>
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<div class="text-justify">In terms of analysis as a strategy for diversification, it consists of investing in a diversified way in crypto assets that we have analysed through a rigorous research process, which provides us with key data such as; type of asset, price, place where it was created, team of developers, market capitalisation, inflationary fluctuation, among other elements of equal or greater relevance, which give us a broader perspective to design our diversified investment strategy.</div>
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<center><img src="https://cryptoitunes.com/images/binance/1622618346507/original/multi-assets-mode-how-it-works-and-what-you-need-to-know.png"/></center>
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<td><center><a href="https://cryptoitunes.com/es/modo-de-activos-multiples-como-funciona-y-que-necesita-saber-05131547" rel="noopener" title="This link will take you away from steemit.com"><strong>Source: </strong> Cryptoitunes</a></center></div></td>
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<div class="text-justify">Regarding the 1-4 rule, a fundamental strategy in optimal portfolio management, it pursues an investment methodology of diversification of crypto assets under a four-part balanced capital splitting scheme.</div>
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<div class="text-justify">Its applicability consists of dividing 100% of the capital 4 times, i.e. in portions of 25% and then investing each resulting portion in 4 crypto assets that we have previously selected to make our diversified investment.</div>
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<center><img src="https://i.postimg.cc/rF5YhtDV/Banner-Fuente-consultada-I.png"/></center>
<div class="text-justify"><h3>SOURCES CONSULTED</h3></div>
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<div class="text-justify">➊ <strong> Anyfantaki S., Arvanitis S., and Topaloglou N</strong> Diversification, integration and cryptocurrency market. <a href="https://www.bankofgreece.gr/Publications/Paper2018244.pdf" rel="noopener" title="This link will take you away from steemit.com"> Link</a></div>
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<center><img src="https://i.postimg.cc/rF5YhtDV/Banner-Fuente-consultada-I.png"/></center>
<div class="text-justify"><h3>OBSERVATION:</h3></div>
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<div class="text-justify">The cover image was designed by the author: @lupafilotaxia, incorporating image background: <a href="https://academy.binance.com/es/articles/asset-allocation-and-diversification-explained" rel="noopener" title="This link will take you away from steemit.com"> <strong>Source:</strong> Academy.Binance</a></div>
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<center><img src="https://i.postimg.cc/0Q6V76gq/Banner-Fuente-consultada-II.png"/></center>
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<center><img src="https://i.postimg.cc/t4gH0T3K/Banner-Scientific-Content-Blogger.png"/></center>
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👍  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , and 189 others
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vote details (253)
@brennanhm ·
The 80/20 rules applies here. 80% of what you invest in will languish or crash, whereas the other 20% will succeed (sometimes beyond your wildest imagination). 
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@lupafilotaxia ·
Hi @brennanhm

That 80/20 is kind of scary lol, well in a way you are right, as a high percentage of the moves are failures, and more so in the violent moves that the crypto market makes.

Best regards, be well.
👍  
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@chucho27 ·
Greetings friend @lupafilotaxia, I want to quote a small part of your post, which strongly caught my attention.

> Successfully navigating the ongoing challenge in the face of volatility in the cryptocurrency market involves designing more assertive investment strategies.

It is a reality that the Blockchain market is highly volatile, so we must be extremely careful before making an investment, many will say but I better not invest in any more projects and continue in the one I am already in, that decision can harm you, since that one project that works for you, in the near future may volatilize, that is why the need to diversify our income.
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@lupafilotaxia ·
Hi @chucho27

Diversification means investing surgically in those projects that we have researched and analysed in depth, this allows us to reduce the risks when making these investments, and protects us against the constant volatility of the crypto market.

Best regards, be well.
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@dgalan ·
Greetings @ lupafilotaxia
There is no doubt that putting all your resources in a single project or investment is very risky. Diversification is a strategy that has paid off and allows us to protect ourselves from losing all our assets at any given time.

Thank you very much for sharing.
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@lupafilotaxia ·
Hello @dgalan

Good point, diversification means lowering risks when making investments, and protecting against the constant volatility of the markets.

Best regards, be well.
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