Crypto is a type of asset that is quite different from traditional assets such as stocks, properties, and so on. Because cryptocurrencies have price movements that go up and down significantly in a matter of hours or even minutes.
On that basis, crypto assets may be quite profitable but can also provide heavy losses when the price falls. Therefore, you may need a special strategy to reduce the risk of loss.
The way you can apply is to diversify crypto assets, which is to divide your asset investment funds into several different crypto assets or currencies. Well, to do this strategy you should combine several crypto assets with different characters, risks, and technologies.
Here are 5 crypto coins that are quite in demand and can be asset diversification.
Bitcoin is referred to as ‘digital gold’ because it is limited in number but has a large number of devotees. The supply of this one coin is only limited to 21 million and by April 2022 there will be at least 19 million Bitcoins in circulation.
Bitcoin is now one of the most valuable Coin assets and has the largest number of users. It can be used for various payments, which is one of the reasons Bitcoin is in great demand which makes its value even higher. To reduce the loss of cryptocurrencies assets, investing in Bitcoin is also the most profitable in the long term.
2. Ether (ETH)
Ether is a coin released by Ethereum with the second largest market cap after Bitcoin. This cryptocurrencies is often referred to as ‘digital silver’ because it is built on the Ethereum blockchain which can be applied in many ways.
Ether facilitates decentralized payments and has smart contract technology that can be applied in various industries. This is the advantage of the Ethereum blockchain over Bitcoin. So that crypto investments are less safe from big losses, Ether can be a suitable recommendation because the high demand also makes the price often go up.
3. Litecoin (LTC)
The 3rd coin recommendation is Litecoin which is a modification of Bitcoin. To share the high Bitcoin transactions, Litecoin was created to share the transaction capacity.
The number of Litecoins is also limited to only 84 million and is one of the most traded coins. This may be suitable as a diversification of crypto assets.
4. Ripple (XRP)
Ripple was created to be compatible with banking systems whose function is to make money transfer, payment settlement, and currency exchange systems safer and faster.
The Ripple network is already used by some of the world’s major banks, so the potential for adoption is even wider. When the performance of other Coin assets is declining, Ripple may not experience the same risk.
5. USD Coin (USDC)
USD Coin is not a crypto asset released by the United States government. This USDC-coded coin is a digital currency whose price is set to have the same value as the American dollar. USDC is classified as a stablecoin or a coin designed to keep its price stable when compared to crypto assets in general.
That’s the recommendation of 5 crypto coins that you need to have as a crypto asset diversification strategy. However, you still need to do your own research, in order to determine which crypto investment option best suits your needs and abilities.
To start investing in crypto and diversify assets, you should use a crypto exchange platform that is legal and has a good reputation.One of them is that you can use the Coinbase platform which is easy to access and friendly for novice crypto investors.