Many love to diversify and invest on different thing instead of putting it all on one coin. In the world of crypto, developers try to find solutions on every niche possible. Maybe the market is not there yet, but in the long term, they will provide solutions that the whole world would like to use.
Diversify by use cases is the strategy and it is easy to understand. I give you an easy example to grasp the concept. Imagine you have 1 000$ to invest in cryptocurrency. Which one to choose?
You want to get exposed to two coins that have two specific use case. In this example you invest on the following 2 coins:
- 600$ on Bitcoin that allows you to transfer value to anyone in the world without borderless.
- 400$ on Ethereum that provide smart contracts and decentralised applications over their blockchain infrastructure.
As you can see in this example you get exposed to two different cases. You have a better chance to have a stable portfolio with this method because you dilute the risk on two coins.
Category by use case
Now we come to the interesting part of this article. You need to be aware that the crypto world starts to be like a sculpture that is taking a really beautiful shape! What I mean is that this space provides various use cases that will provide real value for people to invest money on them.
In return, this will provide value to the tokens and increase the value of your investment, if you have chosen the right one previously.
Here is a short list of possible coins classified by use case:
Crypto debit cart
More exist out there and the list will explode in the coming years. You are eager to know more and have a better idea to apply this strategy and diversify?.
I found a text on Reddit that inspired me to write this post; an incredibly huge list of uses cases. I invite you to check this link and put it on your bookmark, those guys have provided so much value for the crypto investors.
List of use case by category: Top 100 coins grouped by use cases
The advantages of using this strategy are the following:
- Diversify your crypto portfolio and get exposed on the different area of the crypto space.
- Dilute your risk on more coins.
- Have more chance to see your crypto rising instead of crashing to the centre of the earth.
The disadvantages of using this strategy are the following:
- Involves a lot of energy to research and read before you invest your hard earned money.
- Sometimes you need to rebalance to include new coins.
- Many startups pop every day and it is difficult to follow and stay up to date.
This world is moving fast but it is very exciting to be part of it. You know, when you made a good choice to invest on a coin and one morning you wake up and see it risen by x10. This is a good feeling!
Great opportunities exist out there and finding the pearls is really hard. At least, when you spread your investment on the different use cases that fills a real purpose in the world. Your chance to hit the moon increase against the odd.
Now, take action and start exploring the use cases you find existing, research, and understand before pouring money into it.
What is the use cases you are excited about?