Key Risks of Poor Diversification in Crypto Trading
1. Lack of Diversification
Investing only in small-cap altcoins with high volatility while ignoring foundational assets like $BTC and $ETH increases portfolio risk.
2. Overexposure to One Sector
Focusing solely on DeFi or meme coins without balancing with stable assets can lead to severe losses during market downturns.
3. Ignoring Stablecoins $WBTC
Failing to allocate funds to stablecoins for liquidity and risk management reduces flexibility in volatile markets.
4. No Hedging Strategy #USJobsData
Not using hedging tools such as futures or options leaves portfolios vulnerable to sudden price swings.
5. Emotional Allocation
Making allocation decisions based on hype rather than data-driven analysis often results in poor performance.
#CryptoTrading #PortfolioManagement #BlockchainStrategy #CryptoRisk
