If you have already made up your mind to invest in cryptos, the next riddle to solve is how to choose the right cryptocurrency for your portfolio. Going by the latest data, there are over 20,000 cryptocurrencies of all shapes and sizes. However, not all of those are active. If we consider only the active cryptocurrencies, there are about 9,000 of them now. So, it’s going to be quite overwhelming for anyone to pick a few of them for their portfolios. In this post on how to choose the right cryptocurrency for your portfolio, we are going to make this task much simpler for you.
- 1. How to Build the Perfect Crypto Portfolio
- 2. Where to Find New Cryptocurrencies
- 3. Factors to Look for in a New Cryptocurrency
- 4. How to Research New Crypto Coins
- 5. How Many Cryptos Should Be in Your Portfolio?
- 6. Conclusion
- 7. How to Choose the Right Cryptocurrency for Your Portfolio - FAQs
1. How to Build the Perfect Crypto Portfolio
A crypto portfolio is simply a collection of crypto assets (crypto coins, NFTs, and tokens) in which you are going to invest your funds. Risk and returns of cryptos are two primary criteria for selecting cryptos and building the best crypto portfolio. To build the perfect portfolio, you need to identify cryptos with the right risk-return profile that matches your requirements. But before we start, make a note to check out our other articles, like the one on crypto trading strategies for beginners.
1.1 Risk and return
Remember that risk and returns have an inverse relationship. So, when you are chasing higher returns, you are also going to take higher risks. For instance, if you want lower risks and stable returns, you can go for well-established cryptos like Bitcoins and Ethereum. They have significantly less volatility compared to crypto assets which have been introduced recently.
Now, if you want to spice up things a little more and want much higher returns, you need to be willing to assume significantly more risk. So, if you want much higher returns, you can invest in much more speculative crypto assets like memecoins (for example, Dogecoin or Pepe Coin). They have a much higher volatility. (Read our post on crypto volatility to know more about how crypto volatility can affect your returns.)
One of the smart investment strategies is to create a balanced portfolio by including a mix of high-risk and low-risk cryptos. This will help you manage risks while optimizing returns. So, our suggestion is to diversify your crypto portfolio in a way that you allocate a portion for high-risk high-return cryptos while investing the other portion in low-risk low-return cryptos.
All cryptos are not the same. They are different in terms of technology and applications. For example, there are cryptos that are solely designed as a payment method. For example: Bitcoin. Then there are cryptos like Ethereum which have broader applications. We also have cryptos related to AI (Fetch.AI), gambling (Rollbit), online games (Axie Infinity), or the metaverse (MANA). So, another important aspect of diversifying your crypto portfolio is to select cryptos from different domains and categories. Which is why it is important to know what is cryptocurrency and how does it work in the first place.
2. Where to Find New Cryptocurrencies
After knowing the basics of building a perfect crypto portfolio, you may be confronted with questions like how to get new cryptocurrencies for investment. We think exchanges, data aggregators, and social media are some of the quickest methods for finding a new cryptocurrency.
2.1 Crypto exchanges
Crypto exchanges are places where crypto assets are bought and sold. So, whenever a new crypto is launched, it needs to get listed in crypto exchanges for investors to get access to it. However, not all exchanges list all cryptos. It’s always better to stick to reputed crypto exchanges that list genuine cryptocurrencies only. On the other hand, dubious crypto projects are likely to be listed in relatively unknown crypto exchanges. Here are some of the leading crypto exchanges where you can find numerous valuable crypto coins:
- It has about 900 cryptocurrencies listed.
- Bybit frequently lists new and the most potential crypto coins.
- KuCoin offers over 700 cryptos
- Its services are available in 200+ countries
- BTSE offers 100+ crypto assets
- It’s also a great place for discovering new crypto tokens which are recently launched
If you would like to check and compare the above exchanges, check out our reviews on them. You can start with our review on the KuCoin promo code and learn how to get access to a welcome bonus for crypto exchange.
2.2 Data aggregators
Data aggregators are crypto platforms that provide a wide range of relevant information on cryptocurrencies. Here is a list of the 5 top crypto data aggregators:
You can use data aggregators. They help you find a wide range of information, such as:
- Current price of different cryptos
- Cryptocurrency price charts
- Crypto news and market updates
- Market trends
- Historical data
- Information about crypto projects
- Technical analysis
- Trading volume
- Tokenomics of cryptos
You can use crypto data aggregators to know about numerous cryptocurrencies, top-100 or top-50 cryptos, new crypto tokens being launched, and innovative crypto projects. Also, news and updates on these websites would help you stay at the top in terms of your understanding of crypto market dynamics and devising effective crypto portfolio strategies. Now, let’s look at an unconventional source for crypto news - that is social media platforms.
Most crypto projects have dedicated social media handles like X (formerly Twitter) accounts or Facebook pages. Many crypto projects make their official announcements through these platforms. Also, there are several crypto-related communities and groups on online forums like Discord and Reddit. Joining these discussion forums can help you get an idea about what is going on in the broader crypto market.
While using social media to discover cryptos for investment, you must take certain caution. This is because while official social media accounts can give you valuable information, there are bots, fake accounts, and anonymous accounts with misleading information and scams. Here are some of the dos and don'ts of looking for crypto-related information on social media:
- Always stick to the official social media accounts of crypto projects.
- Use social media only as an additional platform for receiving crypto-related updates
- Always verify information from multiple sources to ensure their accuracy.
- Always be cautious when receiving unsolicited investment advice or tips from unknown social media users.
- Embrace verified accounts, avoid bots, fake accounts, and social media accounts with dubious intentions.
- Always consider social media information critically as part of it may be inaccurate, misleading, or exaggerated.
Additionally, you can read some of our articles like the one on the best crypto tools. These tools will help you not only find new cryptos to invest in, but also will help you research, analyse and help you manage your portfolio.
3. Factors to Look for in a New Cryptocurrency
The value of a crypto is linked to its potential use cases. For example, Bitcoin can be used as a mode of payment. Similarly, Ethereum can be used as a mode of payment and as a blockchain platform for developing crypto applications like dApps (decentralized applications) and DeFi (decentralized finance) services. Also, if you would like to invest in a smart contract blockchain platform, Ethereum is the leading choice. Here are the factors you need to look for in a crypto before investing:
- The founders and the key people behind a project
- Technological innovation
- The tokenomics (demand and supply of the crypto)
- Potential use cases
- Major cases of adoption
- Institutional investment
- Price history
To precisely find out when and why certain drops happened in the price history, it is good to know the difference between bull and bear market and how to identify each one of them. Follow through the link to our article on this topic.
4. How to Research New Crypto Coins
Once you have zeroed in on a list of crypto coins for investing, you must conduct in-depth research on each individual crypto to collect more information before jumping in to commit your hard-earned money. Here are some of the ways through which you can research new cryptocurrencies.
Crypto data aggregators
As mentioned above, crypto data aggregators can help you have a wide range of crypto-related information. Using leading crypto data aggregators like CoinMarketCap, you can trace down all relevant information about many crypto assets. You can also verify information on multiple data aggregators to be sure that the data is accurate.
Most prominent crypto projects have their dedicated websites. These websites provide relevant official information on various aspects of crypto projects like their mission & vision, underlying technologies, tokenomics, use cases, and latest updates.
If you want to get hold of the most technical intricacies of a crypto project, you can check its white paper. A crypto white paper is a comprehensive document that outlines all technical aspects and use cases of a cryptocurrency or crypto platform. However, white papers tend to be quite technical and difficult to understand for common investors.
Crypto News Sources
There is a wide range of crypto news sources, starting from offline newspapers and magazines to online portals. We recommend online news sources because of their sheer convenience and cost-effectiveness. There are a number of dedicated cryto-related news websites that provide exclusive crypto news. Some of the top crypto news sources are:
In addition, many financial news websites or general news websites have dedicated sections for crypto news. Some of these top crypto news sources are:
- Seeking Alpha
Once you have learned how to build your portfolio, you should make sure to learn the countless ways how you can use and spend your cryptos. One of them is online gambling, and if you enjoy it, we recommend checking out the renowned BitStarz casino and join using our BitStarz Casino promo code which will grant you an exclusive welcome package.
5. How Many Cryptos Should Be in Your Portfolio?
There is no strict rule for this. There are investors who solely invest in Bitcoin (BTC). Also, there are investors who focus on the leading duo Bitcoin (BTC) and Ethereum (ETH). Other investors include different altcoins (all cryptos except Bitcoin are called altcoins).
Our suggestion is that you should include a number of carefully chosen altcoins in your portfolio along with BTC and ETH. In order to properly diversify your crypto portfolio, you can invest in 10–20 altcoins from different domains like: Utility coins, gambling-related coins, coins related to crypto games, AI-based coins.
Building the perfect crypto portfolio is a matter of balancing risk and return. This can help you optimize your gains for a given risk-tolerance level. We suggest a careful selection of 10-20 altcoins (along with BTC and ETH) to properly diversify risk and optimize gains. Also, make sure that you pick your crypto assets from different domains. Finally, conduct your own due diligence and in-depth research before buying any crypto. Also, make sure to check out our other articles to find the best crypto exchange bonus codes available.
Best Crypto Exchanges
7. How to Choose the Right Cryptocurrency for Your Portfolio - FAQs
7.1 🪙How to get new cryptocurrencies?
Some of the great sources to find a new cryptocurrency are crypto exchanges, crypto data aggregates, and social media accounts of crypto projects. This article describes how to find new cryptocurrencies for investment in great detail.
7.2 🪙What is the best cryptocurrency to invest in 2023?
It’s difficult to suggest a single best cryptocurrency in 2023. Our suggestion is to invest in a portfolio of 10-20 crypto coins after careful selection. This article explains how to choose the right cryptocurrency to trade.
7.3 🪙How to pick the right crypto project?
You can pick the right crypto project after evaluating a number of factors like the key people behind a project, innovation, tokenomics, and potential use cases. This article on how to choose the right cryptocurrency for your portfolio mentions tips and strategies for picking the right crypto projects.