How can I invest in a diversified Cryptocurrencies portfolio? Investors in Cryptocurrencies usually fall under two main groups:
Investors who have a very strong opinion about one or two specific cryptocurrencies which they think will be the best performing in the future (Bitcoin, Ethereum, Ripple, etc.)
Investors who do not have a strong opinion about any specific cryptocurrency but are invested in them out of curiosity, learning interest, a gift, etc.
These forms of investment have the disadvantage of being highly concentrated in one or very few positions, which causes the “sniper” effect.
Accurate Smart Crypto Fund Uses Machine/Statistical Learning to:
Create a diversified portfolio that give us exposure to the Asset Class
Select the main Cryptocurrencies by Market Cap in the medium/long term
Implement a “”Smart”” weight distribution based on factor analysis
Reduce risk and maintain potential for appreciation
(with the factor analysis) enhance the diversification and weighting of the components of the portfolio, as it analyzes variables such as Profitability, Volatility, Drawdown, Correlation, Liquidity, Market Cap, etc.