Dan Bilzerian, famous social media celebrity and professional poker player, has a diversified portfolio of cryptocurrency, with funds. evenly distributed among the most valuable digital currencies on the market.
"For everyone who asks, I have 50% Bitcoin, 25% ETH, 15% Monero and 10% Bitcoin Cash," said Bilzerian
Merits of a Diversified Portfolio of Cryptocurrencies
As Andreas Antonopoulos, a specialist in bitcoin and security, explained, he is in favor of maintaining a diversified portfolio of cryptocurrencies rather than allocating the entire capital in a single digital asset for minimizing risks.
"I own a few different crypto assets as part of a small but diverse portfolio.I risk only as much as I am willing to lose" says Antonopoulos.
Bilzerian uses an approach similar to that of the Antonopoulos personal investment method, consisting of investing in a wide range of cryptocurrencies with different use cases. For example, bitcoin is widely recognized as a strong stock of value, Ethereum as a network for decentralized applications, Monero as an anonymous cryptocurrency and Bitcoin Cash as a digital cash register system.
The four cryptocurrencies in which Bilzerian has invested have distinct but unique use cases. Cryptocurrencies like Monero, Zcash and Dash are fundamentally different from Bitcoin and Ethereum because they offer confidentiality and anonymity to their users. As a result, the three privacy cryptocurrencies serve a completely different market from Bitcoin, Ethereum and Bitcoin Cash.
Invest a percentage that equals your understanding of how technology works
Keeping a diversified portfolio of cryptocurrencies also allows investors to study other cryptocurrencies with the exception of bitcoin, and to better understand the cryptocurrency and structure market other cryptocurrencies.
But, Antonopoulos previously noted that it is important for an investor to invest an amount that is commensurate with the investor's understanding of the technology. Antonopoulos said:
"What percentage of your wealth should be attached to bitcoin? A percentage that corresponds to your understanding of how technology works and your ability to absorb the risks that it entails, which, for the most people, represents a small percentage. "
In April, Bilzerian revealed that he had invested a "hogwash" of money in the bitcoin and the cryptocurrency market. Given that Bitcoin still accounts for 50% of its portfolio and that it has not sold much of the Bitcoin Cash to which it has been accredited after the spur, since it still holds 25% of its Portfolio in Bitcoin Cash, Bilzerian probably has a good understanding of Bitcoin. and is confident in the long-term growth trend of bitcoin.
Most investors in the bitcoin and cryptocurrency market believe that cryptocurrencies such as bitcoin can replace existing banking systems and transform the global financial sector. The stock market valuation of bitcoin is currently 143 billion dollars. But, as the widespread adoption of bitcoin increases and tens of billions of institutional money flock to the market in the coming months, bitcoin will set a solid foundation for an exponential growth rate long-term.
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