Best Crypto Portfolio Allocation in 2022

Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.

Creating a diversified crypto portfolio is crucial, considering how volatile and speculative this trading industry is. 

In this regard, a well-diversified portfolio should contain a wide variety of crypto assets across many different niche markets. The purpose of this guide is to explore the best crypto portfolio allocation for risk-averse investors.

Best Crypto Portfolio Allocation Summary

Holding a diversified portfolio of cryptocurrencies will ensure that investors avoid becoming over-exposed to a small number of coins. This means that if one project doesn’t quite perform as well as expected, other coins within the diversified portfolio could help cover the losses. 

Therefore, the overarching purpose of crypto portfolio allocation is to spread the risk across many different projects. First and foremost, investors should ensure that their portfolio allocates funds to established, large-cap cryptocurrencies. 

Bitcoin and Ethereum represent good options here. At the other end of the scale, investors might also wish to allocate funds to newly launched projects with a smaller market capitalization. This offers investors the opportunity to target higher gains. 

Examples here include the likes of Tamadoge – a newly launched P2E crypto gaming ecosystem that recently raised $19 million in presale funding. Another angle to take is to diversify into other crypto asset markets entirely, such as relevant stocks or even interest accounts. 

Ultimately, the key takeaway is that the more high-quality assets there are in a portfolio, the more risk-averse it is in the long run. Just remember, even allocating a small amount of capital to higher-risk projects can work out favorable long-term, providing the portfolio is well-diversified. 

Best Cryptocurrencies to Add to Your Portfolio

As noted above, the best crypto portfolio allocation strategies will ensure that a portfolio is diversified across many different types of digital assets. 

In this section, we offer some insight into how a well-diversified portfolio might allocate its funds. 

1. Tamadoge – Newly Launched P2E and Metaverse Project 

A well-diversified portfolio will typically hold both small and large-cap coins. Regarding the former, Tamadoge could be worth considering for those wishing to allocate funds to a high-growth project. Founded in 2022, Tamadoge is building a metaverse gaming platform that enables players to win real-world rewards. 

The game focuses on a virtual Tamadoge pet, which needs to be minted via the Ethereum blockchain. The randomization process supported by smart contract technology means that each and every Tamadoge pet is unique from the next. The rareness of each pet will be determined by the NFT’s traits. 

Players will need to train and feed their virtual pet to ensure that it continues to increase its strength and broader capabilities. For example, Tamadoge pets can enter battles with other players, with the winner rewarded in TAMA tokens. It will also be possible to mint new Tamadoge pets by breeding NFTs. 

The team at Tamadoge aims to offer their gaming platform alongside immersive experiences. In addition to metaverse encounters, Tamadoge players will also be able to enjoy augmented reality features via a mobile gaming app. Tamadoge recently completed one of the best crypto presales in recent years – raising over $19 million in under two months. 

Not only that, but those wishing to buy Tamadoge tokens can now do so via the tier-one crypto exchange – OKX. This means that the project will attract vast sums of liquidity across both its centralized and decentralized exchange platforms. In addition to being one of the top trending crypto projects in the market right now, Tamadoge is still a low-cap coin. 

As of writing, for example, CoinMarketCap notes that Tamadoge carries a market capitalization of under $70 million. Even more interestingly, however, is that Tamadoge is one of the fastest growing crypto assets, even though the broader industry is in a bear market. For instance, since listing on CoinMarketCap, TAMA has increased by more than 315%. 

This means that when attempting to execute the best crypto portfolio allocation possible, only a small portion of the investment capital needs to go into high-growth projects like Tamadoge. For portfolio balance, the enhanced risk-reward profile can be countered by larger-cap coins. 

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2. Bitcoin – Best Crypto Asset for Risk-Averse Portfolio Allocation    

On the complete opposite spectrum of Tamadoge is Bitcoin – the largest and most valuable crypto asset in this space. Crucially, although Bitcoin will arguably grow at a slower pace in comparison to the best altcoins in the market, the de-facto cryptocurrency offers some much-needed portfolio stability – at least in the long term. 

At its peak, when Bitcoin hit an all-time high of over $68,000 in November 2021, this digital asset was worth more than $1 trillion. The valuation of Bitcoin has since declined by 70% from its prior peak. However, this offers a superb opportunity from a cryptocurrency asset allocation perspective, as Bitcoin can be purchased at a huge discount. 

Rather than allocating capital to Bitcoin in one lump sum, risk-averse investors might instead consider a dollar-cost averaging strategy. This means buying a small amount of Bitcoin each week or month at a fixed investment stake. In doing so, each purchase will attract a different cost price, which will be averaged out over time. 

Another reason why investors might consider allocating a large weighting to Bitcoin is that the crypto asset is limited in supply. Just 21 million Bitcoin will ever exist, which makes the cryptocurrency a scarce asset. Moreover, the circulating supply of Bitcoin is fixed and predictable, with new coins being minted every 10 minutes.  

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Cryptoassets are highly volatile and unregulated. No consumer protection. Tax on profits may apply.

3. Ethereum – Largest Smart Contract Blockchain With Thousands of ERC-20 Tokens  

Behind Bitcoin, Ethereum is the second-largest crypto asset in this space. And therefore, this is another project to consider when evaluating the best crypto portfolio allocation strategy. As of writing, Ethereum carries a market capitalization of over $150 billion. However, just like Bitcoin, the value of Ethereum has declined considerably since the bull market peaked in late 2021. 

In fact, when compared to Ethereum’s all-time high of almost $5,000, the crypto asset is trading at a discount of 70%. This once again offers an attractive entry price when investing in Ethereum. In terms of longevity, although there are other competitors in the smart contract arena, Ethereum is the de-facto blockchain network in this regard. 

To illustrate this point, there are many thousands of altcoins built on top of the Ethereum blockchain – otherwise known as ERC-20 tokens. This is because Ethereum is a trusted network that is renowned for its security and efficiency. This is especially the case now that Ethereum has completed its much-anticipated ‘merge’ to proof-of-stake. 

This will benefit Ethereum and ERC-20 tokens greatly, as transaction fees are now lower and speeds are much faster. Moreover, Ethereum is now more scalable, which will potentially attract even more projects to its ERC-20 framework. Many of the best upcoming ICOs are Ethereum-based too, which offers even more demand for its decentralized smart contract services. 

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Cryptoassets are highly volatile and unregulated. No consumer protection. Tax on profits may apply.

4. Battle Infinity – High-Growth Play-to-Earn and NFT Gaming Platform 

With the portfolio now solidified with large-cap projects like Bitcoin and Ethereum, investors can consider allocating some funds to another high-growth coin. Another option that we like is Battle Infinity, which is one of the best penny cryptocurrencies in the market right now. Battle Infinity is building a decentralized gaming platform in conjunction with a P2E rewards system. 

This means that by playing Battle Infinity games, players can generate free crypto tokens – paid in IBAT. The first game to launch is the IBAT Premier League – which is a globally-accessible fantasy sports tournament. Players can pick a ‘dream team’ from their favorite sport and earn rewards by accumulating points. 

Points are determined by the real-world performance of each sports player from within the selected team. This offers an experience that connects the virtual and real-world worlds into one ecosystem. Players also have the opportunity to earn the best NFTs within the Battle Infinity metaverse, which can then be traded on the IBAT marketplace. 

Players can also trade their IBAT tokens for other crypto assets on the Binance Smart Chain, via the Battle Infinity DEX. More than $5 million worth of IBAT was sold in presale funding – with the hard cap being reached in just 24 days. Those looking to buy Battle Infinity tokens for maximum portfolio diversity can do so on PancakeSwap or LBank.   

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5. Uniswap – Invest in the Future of Decentralized Finance  

The best crypto portfolio allocation strategies will also look to dedicate capital to growing trends and markets. At the forefront of this is decentralized finance, which offers traditional financial services to consumers without requiring investors to go through a third-party intermediary. Uniswap is a leader in this space, with the project focusing on Ethereum-based tokens.

On Uniswap, investors can swap one ERC-20 token for another without needing to create an account or provide any sensitive KYC documents. Instead, investors simply need to connect an Ethereum-compatible wallet to the Uniswap ecosystem and swap the two tokens in real time. Uniswap is able to facilitate this via an automated market marker (AMM) protocol.

In the most basic of terms, this removes the need for traditional order books. Instead of requiring a seller to be present in the transaction, the AMM system at Uniswap relies on liquidity pools. Each pair will have equal amounts of both tokens, which ensures that Uniswap can offer its trading services in a decentralized manner – 24/7. 

Furthermore, liquidity pools can be funded by anyone, which enables investors to generate passive income on their idle tokens. Uniswap is therefore one of the best yield farming crypto platforms for passive investors. One of the easiest ways to add UNI tokens to a portfolio is to invest via the regulated and low-cost broker – eToro. 

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Cryptoassets are highly volatile and unregulated. No consumer protection. Tax on profits may apply.

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