There are many strategies to invest in the crypto coins in which one of the main one is diversification which is also the advice of seniors investors and many experts.

But I say it matters upon the situation. No doubt diversification is the best strategy to use your money properly but not at all time. Some times diversification is the loss for an investor to use this strategy.

I will explain with examples about how diversification will not be good in many situations. Suppose you are going to invest in crypto coins and wants to apply diversification strategy.

You will go to diversify your portfolio and invest in 5 different coins in different proportions. Among five of the coin 1 coin will for sure will move very good in price while any of the coin may not move or even go down.

In this case you may do profit but not in a way that we hoped. But what if you research on single coin and invest all of your money in that coin. The coin when go high in price then surely you will make huge profit.

But if you have diversified your portfolio then you will not get the profit of all of your money rather you will get the profit of that small amount you invested.

Knowing When to Diversify and When to Concentrate

Diversification is more good in the situations when you see that market is unpredictable or you are confused among the selections of the coins.

But when you are more clear with any coin and you know the coin is fundamentally strong and from here the price will move in a good way then its better to invest all of your amount in that coin.

That is why how situation matters and where to use diversification strategy and where to avoid this method.

The clear example for this that we all know that after ETF approval #Bitcoin price will rise more than altcoins. This is very confirm and clear situation. So in this case its better to invest all your money in Bitcoin in different levels rather to diversify your portfolio.

What do you people think about diversification? Is it good in every situation? Do you think sometimes diversification does not give that profit which we expect? Will be glad to see your answers in the comment section.

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