Popular social media personality and poker player Dan Bilzerian owns a diversified portfolio of cryptocurrencies. Where's why.
Popular social media personality and poker player Dan Bilzerian owns a diversified portfolio of cryptocurrencies. According to Dan, his portfolio is made up of 50% Bitcoin, 25% Ethereum, 15% Monero and 10% Bitcoin Cash. According to Andreas Antonopoulos, a security and bitcoin experts, taking a diversified approach to investing in cryptocurrency is favorable. Therefore, maintaining a diversified portfolio of cryptocurrencies is more favorable compared to investing in one cryptocurrency. Andreas, who owns a diversified portfolio himself, further observes that he only risks what he is willing to lose.
Dan Bilzerian is using the same investment approach taken by Andreas, which entails investing in a wide array of cryptocurrencies with different uses. For example, while Bitcoin is acknowledged as being a stable value store, Ethereum is preferred for its decentralized applications. On the other hand, Monero is known for its anonymity and Bitcoin Cash is a digital cash system. From this example, it is evident that the four cryptocurrencies that Dan has invested in have different use cases. Monero, Zcash, and Dash offer anonymity and thus differ from Ethereum and Bitcoin. In addition, former cryptocurrencies serve a market that is different from that of Bitcoin.
One of the reasons why having a diversified portfolio is favored is that it allows an investor to explore other cryptocurrencies other than the already common Bitcoin. This helps investors get a better understanding of how cryptocurrencies work and the structure of different crypto coins. As per Antonopoulos’ advise, it is wise for an investor to invest an amount that is proportionate to their understanding of cryptocurrencies. According to him, it is important to invest a percentage of one’s wealth that equals their understanding of the cryptocurrency technology. This means an investor’s ability to absorb the risks that come with investing in cryptocurrency.
In April Dan revealed that he had invested a huge amount of money into Bitcoin, which accounts for half of his diversified portfolio. Considering that he is yet to sell much of his Bitcoin cash, the poker players probably has a very good understanding of bitcoin and the long-term growth trend of the cryptocurrency. The vast majority of people that invest in cryptocurrencies believe that these digital currencies will replace existing banking systems and thereby be transforming the international finance industry. Currently, the market valuation of Bitcoin stands at $ 143 billion. With the rise in mainstream adoption of Bitcoin and other cryptocurrencies couple with the flow of tens of billions of institutional money into the market, Bitcoin is set to establish a foundation for a long-term growth rate.