Diversification has been playing a vital role in the cryptocurrency investment and it shouldn't be underestimated with the way people or Investors take it. In fact, we have been handling diversification with levity hands.
What is diversification itself?
Diversification is the means of venturing into different kind of variety of things. It's another means of weighing your options by prioritization by not putting your eggs in one single basket.
What diversification in cryptocurrency Investment?
Where diversification of cryptocurrency Investment is the process whereby an investor invests in more than a single crypto coin. That's diversification, despite Bitcoin being the center focus and attraction for other coins. We have some who doesn't invest in Bitcoin but other coins. Attimes the bear market doesn't affect all coins. There are some coins that would be in the bull market while others would be in the bear market St the same time and in the same period.
Does diversification of cryptocurrency investment helps cryptocurrency Investors mental health?
Before we talk about how diversification helps cryptocurrency Investors mental health,we have to talk about what mental health means. Mental health deals with the human
- Cognitive
- Affective
- And emotional domain.
While the Investors is investing in cryptocurrency, anything that happens along the line, the 3 mentioned above points will be affected. So in other to balance things,that is where diversification comes in. Diversification comes in to help the Investors mental health by diversifying by investing in different cryptocurrency coins. Assistance render by diversification towards the cryptocurrency investors mental health, It helps the Investors not to lose their Investment at once because they do not invest in a single cryptocurrency thereby it's helping the Investors to maintain and stabilize their mental health. You can't in any compare someone who invested all his asset or wealth in a single cryptocurrency with someone who diversify or allocate his or her asset or wealth in numerous coins or tokens.
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I completely agree with you, without a doubt diversification is something very important when we invest in cryptocurrencies. Of course, it is also very important that we know how to manage our trading and investment capital very well when diversifying our portfolio, because it is well known that when the price of Bitcoin falls, the prices of almost all altcoins also fall. I think the peace of mind will also come from that in that sense.
I say this because, although it is very true that some altcoins remain bullish even when the price of Bitcoin is in full downward trend, it is also true that we do not know exactly which altcoins will bear the fall of Bitcoin by themselves (it is that is, we don't know which altcoins will do the exact opposite of the Bitcoin price), so we need to manage the associated risks very well.
Good post. Thanks for sharing.
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