Cryptocurrency holdings of an investor: Bitcoin, Ethereum, and more.
Cryptocurrencies Resurgence: A Guide for Beginners to Balance a Bitcoin and Ethereum Portfolio
By Quentin Bas Lorant, Investment Journalist
In the current market, Bitcoin's recent surge has revitalized the cryptocurrency scene. After hitting an all-time low of $75,000 on April 9, the digital currency has since recovered and reached a new record of $111,000 on May 22, marking a 17% increase since the beginning of the year. This upward trend could potentially pull other cryptocurrencies along with it, piquing the interest of both experienced and new investors.
In this context, where Bitcoin is becoming increasingly institutionalized, particularly in the US, jumping on the bandwagon may seem tempting, even for those who missed previous investment opportunities. Before diving in, however, it's essential to consider a few tips, especially for beginners.
Navigating the Portfolio: Bitcoin and Ethereum as a Foundation
The platform Coinhouse offers strategic portfolios tailored to different profiles, and for novice investors, the allocation primarily focuses on Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies by market capitalization. According to Thibaut Desachy, director of asset management at Coinhouse, this "Core" allocation is ideal for beginners who want to start investing in cryptocurrencies. It requires minimal maintenance and is based on Bitcoin and Ethereum, which are the most developed and secure cryptocurrencies within the ecosystem.
James D. Touati, a consultant, trainer, trader, and president-founder of The Nest, shares a similar sentiment with a more even split, recommending a 50/50 allocation between these two digital assets. Bitcoin is still seen as the safe haven or "digital gold," with predictions reaching up to $200,000. Ethereum, on the other hand, is gaining institutional adoption due to its promising technology for creating digital contracts known as "smart contracts."
Diversification: The Key to Navigating Crypto Volatility
Alexis Bouvard, France director of Bitpanda, believes that diversification is crucial for beginner investors to gently become accustomed to the inherent volatility of cryptocurrencies. The platform offers crypto indices, which expose investors to the top five cryptocurrencies at any given moment, reducing risk by spreading exposure across multiple assets.
Lastly, Benjamin Chemla, co-founder and CEO of Shares, recommends a dollar-cost averaging (DCA) strategy to minimize the impact of large price fluctuations. This strategy involves regularly investing small amounts over time, potentially reducing risk and helping beginners manage their emotions when investing in volatile assets.
Additional Resources:
Explore our online buying and selling platform to invest in cryptocurrencies such as Bitcoin, Ethereum, and more.
Stock ExchangeStock Market Advice
In the realm of cryptocurrency investing, technology and finance intertwine as beginners navigate their way through a resurgent market.When constructing a portfolio, considering a 'Core' allocation that focuses on Bitcoin and Ethereum, the most developed and secure cryptocurrencies, can be advantageous for beginners seeking minimal maintenance in an otherwise volatile market.
