Although I studied industrial engineering, I have never worked in a factory. However, during my banking career, I greatly benefited from the perspective that industrial engineering education gave me.

Optimization, which is the basic notion of industrial engineering, also works in portfolio management. It is extremely important to ensure that the risks and returns are at the optimum level.

![antoine-dautry-_zsL306fDck-unsplash.jpg](https://files.peakd.com/file/peakd-hive/muratkbesiroglu/23vsSN14pKSFbfYzfV3pXGdFtrekxN87gnTsNduCtzSD5NzB4nVFSgbD3p1urjqBgj4RS.jpg)

Photo by <a href="https://unsplash.com/@antoine1003?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Antoine Dautry</a> on <a href="https://unsplash.com/s/photos/math?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Unsplash</a>

When it comes to portfolio management, the first thing that comes to my mind is the question of crypto investment percentage. According to Statista.com, there were $467 trillion in financial assets in the world by 2021. The total market value of cryptocurrencies on the same date was $2.3 trillion. This means that only 0.5% of the world's financial assets are currently invested in the crypto market. Whereas, about a third of my financial assets are in crypto. There is a serious mismatch. Who is wrong?

[In my previous post](https://peakd.com/hive-167922/@muratkbesiroglu/hodl-me-baby-one-more-time) I explained the Sharpe Ratio which is used to measure the risk-adjusted return. This ratio measures the quality of financial returns by taking into account price volatility. Sharpe Ratios of crypto assets such as Bitcoin, Ethereum, Hive are quite high. Although the price volatility of crypto assets has decreased compared to the past, it is still very high. On the other hand, Sharpe Ratio is still attractive for many crypto assets as the average return is much higher.

What percentage of financial savings should be invested in crypto? In 2017, this rate was around 10% for me. However, nowadays, blockchain-based infrastructures have become much more established. Few crypto-based infrastructures were actually in use in 2017. One of them was Steemit. Today, millions of people use DAPPs in areas such as DEFI, NFT, and play-to-earn. In 2017, the number of Ethereum wallets with more than zero balance was less than 1 million, but now this number has reached 71 million. More than 1 million people use Opensea alone. More than 500 thousand people used Splinterlands last month.

There is no one-size-fits-all answer to the question of what percentage of our financial assets we should keep in crypto. As my knowledge of crypto increased, I began to doubt less about the potential of this world. People who are willing to take risks and are open to innovations feel more comfortable about investing in crypto. Due to its high price volatility, it is necessary to approach crypto on a long-term basis. Those who see crypto as a means of getting rich in a short time mostly turn to other channels after a short adventure.

And of course, there is the issue of crypto portfolio allocation. Currently, the market caps of Bitcoin and Ethereum make up 40% and 18% of the crypto total market cap, respectively.


![wu-yi-Bfrk9RCOhRE-unsplash.jpg](https://files.peakd.com/file/peakd-hive/muratkbesiroglu/23wCFwSWvWNvFgqkXQH6JXvw8XacGfyKcxHUvKGt2W7tA19maJsr5Q7FXx8x4UQRTqASQ.jpg)
Photo by <a href="https://unsplash.com/@takeshi2?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">wu yi</a> on <a href="https://unsplash.com/s/photos/math?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Unsplash</a>
  
Excluding stable coins, Bitcoin is the coin with the lowest price volatility. It also has advantages such as prevalence, reliability, high liquidity, and brand value. The downside is that its return is low compared to altcoins.

Ethereum is the source of innovations such as DEFI and NFT, which have become a trend in the crypto world. It is an important option with its low inflation, high average return, and high amount of liquidity.

Since I consider crypto as a long-term investment, I prefer blockchains that have tangible uses and are constantly evolving. Hive, BNB, Solana, Terra, and Sandbox are among my favorite coins these days.

Hive, Leo and other Hive ecosystem tokens/NFTs currently make up two-thirds of my crypto portfolio. This is because I know the Hive ecosystem closely. I am aware of the opportunities that arise here at an early stage and naturally, I do not want to miss them.

The ideal portfolio distribution in my mind: 20% Bitcoin, 25% Ethereum, 40% Hive assets, %5 BNB, 10% stable coins. I plan to use stable coins to invest in new projects or to buy coins during extreme price drops in the market.

Last year was a pretty bright one for crypto. We entered this year with price declines. The value of some coins has dropped to a quarter or a fifth. There were even coins whose value dropped tenfold. Although the rapid decline in prices bothers everyone, investors who acted according to a game plan passed this period comfortably.

Crypto investing requires being bold and open-minded. When awareness of risk management is added to these features, an optimum crypto investor profile emerges.

Thank you for reading.