How to Creating index-tracking crypto portfolio 2021

 

I Show You How To Make Huge Profits In A Short Time With Cryptos:

Creating an index-tracking crypto portfolio.

This article introduces you to the 1st field, where I invested my money separated for cryptocurrencies.

Then, I will show You how I created an index-tracking crypto portfolio.

 Stay calm if You are a beginner at this topic; you will understand everything because I will explain everything step by step.

Like in any other business, it is crucial in cryptocurrencies to minimize the risks.

Therefore, I invested my money in the 3 main fields of cryptocurrencies, significantly lowering the risks. The total amount spent on the crypto business is 30% of my savings. I never invest cash or use bank loans; this is my principle!

I invested 60% of my money separated for cryptocurrencies into the Index Tracking Crypto Portfolio.

Many plans to buy Bitcoins from their total savings, keep them for years, then sell them when achieving the desired exchange rate gain.

This is a terrible idea due to the following reasons:

First, it is precarious to keep your money only in Bitcoin. What happens if the exchange rate falls for a very long period etc.   

Sometimes an altcoin (the summary name of cryptocurrencies other than Bitcoin) grows much quicker than Bitcoin.

The main benefits of index tracking crypto portfolio:

You do not depend on only 1 coin.

The risk is diversified between more currencies.

You can cover the majority of the complete market capitalization with your portfolio. The marker capitalization means the value of a coin specified by all investors.

In some instances, You can gain much more profit than buying only Bitcoins.

I will show You how did I create my index-tracking crypto portfolio.

When creating an index-tracking portfolio, the most important is that the portfolio shall cover the majority of the market capitalization.

As the first step, I visited the coinmarketcap.com site, where You can find the market capitalization of each coin, as well as the capitalization of the entire crypto market:

Coinmarketcap

You can clearly see the complete market capitalization on the image, which is currently the following (as of the date when I made this study):

137.398.323.250.- USD

You can see the market capitalization of each coin.

Bitcoin is currently at:

69.697.169.475.- USD

These two numbers will be important later.

I take only the first 10 coins into consideration.

I select those from the first 10, older than 3 years. This is very important because you often find a new coin whose price is artificially hyped, which disappears from the market (pump and dump).

Currently, these coins match the conditions:

Bitcoin

Ethereum

Ripple

Litecoin

Tether

Stellar

Now I calculate how much percent of the complete market capitalization the actual coin take.

In the case of Bitcoin:

(Bitcoin’s market capitalization / Complete market capitalization) x 100

(69.697.169.475 / 137.398.323.250) x 100 = 50.72%

I made this calculation for every selected coin.

Then I buy each coin in this proportion. So I accept Bitcoin with 50.72% of my money and so on. Since only 5 coins passed the filter, some percent remained in the end, which I proportionally distributed between the 5 coins.

I balance my portfolio monthly, which means I do the same steps and modify the distribution of my money between the coins according to the new figures.

That’s all!

I could cover the majority of the capitalization of the quality coins with my portfolio.

 My risk is much lower, and I do not depend on 1 coin, and if any of the coins raise much, I can realize an extra profit.

Where can I buy Bitcoin and altcoins for excellent prices:

I use the Binance cryptocurrency exchanger; I am delighted because they always sell Bitcoin reasonably, and the transaction cost is as low as 0.1%.

Where can I store my purchased coins:

In the following article, I will tell You how To store your Bitcoin and cryptocurrencies safely and securely; take it. 

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