Rob Wolff on market cycles and diversifying your portfolio

The ongoing bear market seems to have shaken the confidence of even the most optimistic cryptocurrency investors. But many believe that weathering the storm is the only way to survive in the industry.

Host of a YouTube channel called Rob Wolff. digital asset newsis one of them.

In an interview with Cryptonites’ Alex Fazel, Wolff said the bear market shows that everyone has the brains to invest in cryptocurrencies, but not everyone can. said. Companies that have experienced previous market cycles and survived the crash of 2018 appear ready to ride the current bearish wave and wait for better market conditions. All the “crypto travelers,” as Wolff calls them, have already left.

One way to weather a bear market is to diversify your portfolio. Wolff, who was a proponent of diversification, said he had two perspectives on it.He explained that if you diversify your portfolio too much, you may reduce your chances of earning much as your investments are spread out over a dozen protocols. you can make a profit be in timebecause more investments are more likely to time the top.

Wolff, who was careful not to offer specific financial advice, said allocating 1% to 2% of his crypto portfolio to “degraded altcoins” could be a worthwhile bet. said there is He said spreading this small percentage of the investment across a dozen or so low-cap altcoins, one of which could result in an asymmetric bet, pulling the rest of the portfolio out of the red.

Nevertheless, investing in cryptocurrencies is much more difficult than investing in traditional financial instruments such as stocks, he said. Valuation of stocks is easier than valuation of cryptocurrency projects. Both the technology and the projects that utilize it are advancing so rapidly that it is impossible to predict where the industry will head.

This is why investments should be flexible and change over time.

One of the biggest lessons Wolff has learned as an investor is that concrete price predictions are the epidemic of the industry. The more he learns about the industry, the more he realizes how little he knows.

Many optimistic investors who have gone deep down the rabbit hole this Market cycles will vary, but Wolfe has enough experience to know that’s not true.

“It will never change,” he told Fazel. “Everything will eventually go down.”

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