Core Portfolio Building Principles
Diversification is Key
Never put all eggs in one basket. Spread risk across multiple quality projects to protect against individual failures.
Quality Over Quantity
Hold 5-10 well-researched projects you understand. More is not better—it's impossible to track properly.
Bitcoin as Foundation
Bitcoin should be your largest holding (40-60%). It is the safest bet in crypto with the longest track record.
Regular Rebalancing
Rebalance quarterly to maintain target allocations. This forces disciplined profit-taking and buying opportunities.
Crypto Portfolio Allocation Models
Conservative Portfolio (Lower Risk)
Best for: Beginners, risk-averse investors, retirement accounts
Balanced Portfolio (Moderate Risk)
Best for: Most investors with 3+ year horizon, moderate risk tolerance
Aggressive Portfolio (Higher Risk)
Best for: Experienced investors, high risk tolerance, portfolio you can afford to lose
How to Select Portfolio Assets
Not all cryptocurrencies deserve a spot in your portfolio. Use these criteria to evaluate potential holdings:
1. Market Cap & Liquidity
What to look for: Top 50 by market cap, daily volume above $50M
Why it matters: Liquidity ensures you can exit positions when needed. Low liquidity = manipulation risk.
2. Track Record
What to look for: At least 2 years of operation, survived a bear market
Why it matters: Projects that survive bear markets prove resilience. New projects are unproven.
3. Real Use Case
What to look for: Actual users, real-world adoption, solving a problem
Why it matters: Projects without utility are pure speculation and rarely survive long-term.
4. Development Activity
What to look for: Active GitHub commits, regular updates, engaged community
Why it matters: Dead development = dead project. Active development shows commitment and progress.
5. Tokenomics
What to look for: Fair distribution, limited supply, clear token utility
Why it matters: Bad tokenomics (heavy team allocation, unlimited inflation) destroy value over time.
Portfolio Risk Management Rules
Never Go All-In on One Asset
Even Bitcoin. Single asset risk is unnecessary. Spread across at least 3-5 quality projects.
Limit Speculative Positions to 20%
Small cap altcoins and new projects should not exceed 20% of your total portfolio, ever.
Keep Some Dry Powder
Hold 5-10% in stablecoins to buy dips. Being fully invested means missing opportunities.
Set Position Size Limits
No single altcoin should exceed 10-15% of your portfolio. If it grows beyond that through price appreciation, rebalance.
Use Stop Losses Mentally
Decide in advance when you'll exit positions that aren't working. Down 50%? 70%? Set limits and stick to them.
When and How to Rebalance
Rebalancing forces you to sell winners and buy losers—the essence of "buy low, sell high."
Rebalancing Schedule
Time-Based (Recommended)
Rebalance quarterly (every 3 months) regardless of price movements. Simple, disciplined, tax-efficient.
Threshold-Based
Rebalance when any asset drifts 10%+ from target allocation. More responsive but requires monitoring.
Example: Your Bitcoin target is 50%. After a bull run, it's now 70%. Time to sell some BTC and buy underweight positions.