How are you? By Allah's grace, I'm doing very well.

Building a strong crypto portfolio and ensuring its proper diversification requires specific planning, research, and risk management.

1. Initial steps to building a portfolio

Before you start building a portfolio, it is essential to determine your financial goals, risk tolerance, and investment time frame. What is your goal? Long-term wealth creation? Quick profits? Or backing a specific crypto project? How much are you willing to lose? The crypto market is highly volatile, so you should invest an amount that will not affect your daily life if you lose it. How long do you want to hold your investment? (e.g. 1 year, 5 years, or more than 10 years).

2. Core Asset Selection

A large portion of the portfolio (typically 60% - 80%) should be held in proven and relatively stable coins in the market. This is often considered the foundation or 'digital gold' of a crypto portfolio. Despite diversification, holding a large portion in Bitcoin can provide some protection from market volatility. Its importance as a core platform for smart contracts and DApps is immense. It adds technological diversity to the portfolio.

3. Diversification strategies

Diversification is the process of spreading your investments across different classes so that if one asset or market segment fails, the entire portfolio is not affected. Coins with a market cap of more than $10 billion (e.g. BTC, ETH). These are relatively low risk. Coins with a market cap between $1 billion and $10 billion. They have high growth potential, but also moderate risk. Coins with a market cap below $1 billion. These are very risky, but have the potential for huge returns. A small portion of the portfolio (5%-10%) can be allocated to such coins. Layer-1 protocols: Platform coins with their own blockchain (e.g. Solana, Cardano, Avalanche). Layer-2 solutions: Scaling solutions for Ethereum (e.g. Polygon, Arbitrum, Optimism). Lending, swapping, and liquidity protocols (e.g. Chainlink, Uniswap). Blockchain-based gaming and NFT platforms. A small portion of the portfolio can be held as stablecoins (e.g. USDC, USDT) to protect capital during extreme market volatility. Depending on the type of crypto project, privacy coins: (e.g. Monero). Exchange tokens: (e.g. BNB). DAO token: Governance token of a decentralized autonomous organization.

4. Risk Management & Rebalancing

Building a portfolio is not the end, it needs to be monitored regularly. Over time, the value of some coins may increase faster than others, which will change your predetermined allocation. For example, you may have decided to keep 30% in Bitcoin. If it increases to 40%, then take the profits and reinvest the remaining 10% in other coins or classes. Rebalancing. Invest a fixed amount of money at regular intervals, regardless of the market price. This protects investors from the risk of buying everything at a high price. Use a hardware wallet to keep your crypto assets safe. Don’t keep all your assets on exchanges.

5. Research and Due Diligence (DYOR)

Before investing in a project, thoroughly check the team behind it, the technology’s functionality (whitepaper), and the roadmap. Stay informed about crypto industry news, regulatory changes, and technological developments.

A sample portfolio structure (approximate)

Investment areas	Types	Approximate proportions	Brief description of the role
Core holdings	BTC, ETH	50% - 60%	Market fundamentals, long-term value retention.
Complementary technologies	Layer-1, Layer-2	20% - 30%	Technology diversity and high growth potential.
Specializations	DeFi, Gaming, NFTs	10% - 15%	Risk and high-return potential of specific industry sectors.
Cash/Stablecoins	USDC, USDT	5% - 10%	Quick investment opportunity or protection during market downturns.

Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.

Me behind the camera & keyboard

I’ve always loved sharing my passions with you — from crypto and movie reviews to photography, storytelling, and blogging. Now, continuing that creative journey, I’ve stepped into a brand-new world — Gaming ! 🎮 | 🎥 On my YouTube channel Bokhtiar The Survivor — I’m consistently working to bring you the raw thrill of my gaming experiences — the emotions, the excitement, and those unforgettable moments that make every game feel alive.