Expanding my Crypto Portfolio #1 - Creating the process

Greetings everyone!

Since the middle of last year I have gone deeper into the world of cryptocurrencies, and since then, after hours and hours researching on the subject, i am increasingly convinced that there is a revolution going on.

At first, my interest in blockchains was based on the possibility of trading in this market that, in recent years, has presented astronomical price increases.

But over time, and after learning a little more about some of the more than 1600 existing crypto coins, i began to understand that this revolution is not only happening in relation to financial transactions, but in everything we know today as the Internet.

Existing projects that are looking to change the way the great network works range from fully anonymous financial transactions to decentralized cloud computing systems.

Creating a portfolio of crypto coins

Soon after a having a better understanding of how cryptocoins and blockchains work, I started to put together my cryptocoin portfolio.

It is not a very large value portfolio, but of sufficient size to be able to manipulate the coins and perform some experiments to know and understand even more how this new technology works.

At the moment my portfolio of crypto coins is composed as follows:

• STEEM - 57%
• BTC - 12%
• EOS - 12%
• ETH - 5%
• LSK - 4.5%
• BCH - 4,5%
• SBD - 1.5%
• LTC - 1%
• Other currencies with low value ​​- 2,5%

Most of the portfolio is in STEEM because of the content I produce here generates cryptocoins, but a part of this amount I am converting into other currencies in constant readjustment of portfolio distribution.

Expanding the portfolio

The period I've been building this portfolio has focused more on acquiring well-established currencies such as the Bitcoin and Ethereum , and eventually performing a few more risky trades like EOS and Lisk.

But the question I have been asking myself over the last few days is how to expand the portfolio to other less known currencies that have future growth potential, and how to decide which currency should I choose ...

So in a conversation with another steemit user, @diogogomes, in which I asked for some suggestions on possible currencies to acquire, he said the following:

"I prefer to diversify by sector"

And this sentence gave me an idea: Create my own filtering and selection process for crypto-coin investments.

Sector? But is not everything criptomoeda?

Do you remember that I mentioned the revolution that is happening in the way we use the internet?

Because not all cryptocoin/ token / blockchain has the same function. Although they all have a financial value and are traded in a number of exchanges, it is enough to take for example the two largest currencies in market capitalization today: Bitcoin and Ethereum .

Each of them has a completely different problem solving proposal:

• Bitcoin: It is proposed to be a decentralized method of financial transactions.
• Ethereum: It is a platform where you can build applications and smart contracts, using ETH and other tokens to perform the most varied types of transactions

Trading or long-term investment?

Cryptocoins can be traded like any other asset, but with the great difference that there are no centralized stock exchanges that focus these trades.

There are numerous exchanges, in various locations around the world, with the most varied systems and rates.

This makes it completely possible to trade the cryptocoins in day trade / swing trade.

But despite the great price volatility being extremely attractive to trading, I decided to treat cryptocoins as a long-term investment for a few factors:

Extreme volatility

Although high volatility makes large profits possible, this also causes the risk to increase considerably.

In the crypto-market it is very difficult to establish a good size for a take profit or a stop loss because it is the extreme volatility in some hours is constant, where within the same hour, the price may fall 150%, and a few minutes later grow 200%.

There is insufficient data to look for patterns and indicators

Although some indicators are useful in analyzing the movements of the cryptocurrency market, mostly to identify trends, this is a still very new market, and except for Bitcoin, no currency has a price history big enough to properly establish movement patterns that can be effectively identified.

Even Bitcoin is today at a completely new price level, and there is not enough data for an accurate technical analysis at current levels.

The technological revolution

Cryptocurrencies and blockchains are going through a process similar to the .com companies of the 1990s.

Yes, we're probably seeing a bubble, because of what I've seen so far, it will be impossible for all 1600 existing coins to survive.

There are similar projects competing directly, there are projects that are purely scam, there are projects that have no reason to exist in a blockchain ...

In the era of .com companies, many of the startups that were created disappeared (some overnight), but some survived the massacre, like Apple, Google, and Amazon.

Market capitalization

Turning to the .com bubble, one must put in perspective that this bubble / market was pratically confined to the United States alone.

Blockchains have a worldwide reach.

As I wrote this article, the market capitalization of crypto coins was $ 435 billion.

Seems a lot?

Consider this chart created in October 2017 when the Cryptocurrencies market capitalization was $ 173 Billion, and it is put into perspective with other financial markets in the world.

Even though cryptocoins are in a bubble, there is still plenty of room for a big growth.

And how do you decide which currency to invest in?

Since this initial article turned out to be a lot bigger than I thought, I'll go into a little more detail on what that process of choice I'm creating will be, but basically it will take into account the following factors:

• What "sector" will I invest in at the moment
• What blockchains exist in this sector
• What are the advantages / features / fundamentals / team / case studies that already exist in each of these blockchains
• In each sector, I should at first choose one blockchain for the investment
• What is the prospect of blockchain usefulness in the future
• What is the perspective of technical analysis of these blockchain

My initial idea is to keep these currencies that I will acquire (HODL!) by the end of the year, and then re-evaluate the positions.

In the meantime, I will always be watching the price movement, because if we have a very high movement at some point, I may sell some of the coins.

In the next article of the series I will detail the process a little more, already defining what will be my first choice

And to see if this process will work and make sense, I will also keep the portfolio of the positions I am getting into updated as much as possible.

See you soon!

Consider this chart </ span> created in October 2017 when the Cryptomanes' market capitalization was $ 173 Billion, and it is put into perspective with other financial markets in the world.

Even though crypto-coins are in a bubble, there is still plenty of room for big growth.

And how do you decide which currency to invest in?

Since this initial article turned out to be a lot bigger than I thought, I'll go into a little more detail on what that process of choice I'm creating will be, but basically it will take into account the following factors:

• What "industry" will I invest in at the moment
• What blockchains exist in this industry
• What are the advantages / features / fundamentals / team / case studies that already exist in each of these blockchains
• In each industry, I should at first choose a blockchain for the investment
• What is the prospect of blockchain usefulness in the future
• What is the perspective of technical analysis of these blockchain

My initial idea is to keep these currencies that I will acquire (HODL!) by the end of the year, and then re-evaluate the positions.

In the meantime, I will always be watching the price movement, because if we have a very high movement at some point, I may sell some of the coins.

In the next article of the series I will detail the process a little more, already defining what will be my first choice

And to see if this process will work and make sense, I will also keep the positions I am getting updated as much as possible.

See you later!