The last days on the cryptocurrency market have passed under the sign of a price correction, which did not come as a surprise to participants. Overheating of the market in recent months has led to the fact that capitalization has decreased significantly. This opens up prospects for buying cheaper cryptocurrency assets for long-term retention.
At the same time, I expect that in the coming weeks the market will form another wave of decline, and after that it makes sense to re-enter cryptocurrency assets and expect the market to recover until the summer of 2022.
The essence of the idea: the formation of a portfolio of the most stable Cryptocurrency after the market capitalization fell to $ 1.2-1.3 trillion.
Portfolio composition:
–BTC – 20%
–ETH – 15%
–BNB – 15%
–ADA – 10%
–XRP – 20%
–DOT – 10%
–UNI – 10%
This portfolio is characterized by strong diversification, as it represents assets from different market sectors. The largest shares are given for BTC, which will be in high demand from institutions amid falling prices, as well as XRP, which in the foreseeable future has a chance to reach $ 3 (historical maximum).
The idea may work, since nothing catastrophic has happened for the cryptocurrency market: historically, corrections of 50% have already happened, and the market recovered after that.
The demand for cryptocurrency remains high, and on the fall to $ 30 thousand, it only intensified. Well-known “whales” are in no hurry to sell BTC, and the development of cryptocurrency products for institutions is only gaining momentum.
An idea may not work for two reasons:
The first is the growth of the crypto market from current levels, without a further decrease in capitalization. This reduction is necessary in order to “shake out” unnecessary participants from the market.
But it is possible that the market will find support at the current levels. and will begin to grow without a decline. In this case, the idea will not be relevant, since the strategy of entering the portfolio involves another round of decline.
The second reason is the strengthening of the negative rhetoric of the regulators following China. If any of the major economies and its financial authorities decide to voice their dissatisfaction with the sphere and prohibit local financial companies from working with Cryptocurrency, this will only intensify the market decline and lead to a significant outflow of funds from Cryptocurrency.
The potential portfolio return is expected at 60-70% per annum, with potential risks of 30-40%. To minimize them, I recommend using hedging through Bitcoin options to hedge against a deeper market fall.
