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Building Your Crypto Portfolio with a Pyramid Structure

09/18/2018 10:00

Welcome to Bitcoin Live. Below is an excerpt from Mark Dukas' article on Building a Crypto Portfolio:

Now that we’ve touched upon the idea of holding more than one coin, let's look at an investment pyramid in order to figure out how to properly allocate holdings.


PURPLE - This represents 50%-65% of your long term portfolio and is your highest quality holding. I put bitcoin solely in here. Some other investors believe that Ethereum warrants a position in this section. I move ETH to orange and it is not something I actively hold (anymore). For me bitcoin comprises 50%+ of my pyramid always and forever. Plain and simple. When my portfolio net worth has reached a certain level I plan to shift this to 75%-80%.  The reason being, bitcoin is the reserve currency for crypto and potentially for failing world currencies in the future. Those two reasons are why I want the strongest in my holding. I am not greedy and happy with the returns it has provided and will continue to provide as future technology layers are built.

ORANGE - This represents 20%-25% of your portfolio allocation. This is dedicated to large cap cryptos like NEO, LTC, XRP, ETH, XMR, XLM, ADA. Anything in the top 15.

LIGHT BLUE - 10%-15% of your crypto holdings. Mid caps that allow you to have higher risk but higher potential rewards. These are true alt coins which allow good setups and coins with solid road maps but don’t have the market cap yet. As of 2018 I look at coins ranking anywhere from 25-75 in total market cap. (Decred, ICON, WanChain, etc)

GREEN - This can be 1-5% of your capital and the reason I am varying this percentage is dependent on your free cash flow, risk tolerance age to retirement or even if you want to have this as part of your mix. The higher percentage threshold the harder gut punches you’ll face during every bear market. This is full fledged “gambling.” The reason why you only allocate such a low percentage is because a bad choice will not destroy your portfolio. You won’t be exposed to risk as heavily and you’ll benefit greatly in a bull market. If the market goes 10x then you see a 30-50% increase. But if it goes down the dumps you’re only looking at a 1-3% loss on your portfolio and can even exit the position if things change. Green means you might need to walk away someday.


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  • 0

    Thanks Mark. I have a request, can you please let me know or write up on Masternodes? What it is and how it works? and few good masternodes coins..

    Submitted 1 year ago by Hunk

    Hey, there I will look into the masternodes discussion.  I shy away from them mostly because there are definitely some drawbacks.

    Submitted 1 year ago by Mark Dukas
  • 0

    Good advice, seems reminiscent of a tweet I saw https://twitter.com/CryptoCobain/status/922197320292323328?s=19

    Submitted 1 year ago by Jason77

    Some good points in this post. There are a few differences and allowances I take into account for allocations.  The rest of the article details those along with proof of stake and coins allowing for passive income and why they matter


    Submitted 1 year ago by Mark Dukas

    I also discuss why holding Bitcoin can be the only thing to do and having diversification into so many coins not really worth it unless you can manage your coin holdings etc.  The majority of people I believe best suited is to just hold BTC.

    Submitted 1 year ago by Mark Dukas
  • 1

    I agree with this, least risk:

    The majority of people I believe best suited is to just hold BTC.

    Submitted 1 year ago by Jason77

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