How I Would Invest $10,000 in Crypto

Reading time: 2 min

A friend recently texted me.

“Yo Fifty, are you still in crypto? What should I buy?”

The buzz is undeniable. Crypto has been recapturing people’s attention and even more so with the latest Bitcoin ETF approval.

There’s a surge of new interest and there are probably a lot of other people, like my homie, wondering the same thing.

So, today I’ll be talking about how I would invest if I were starting in the crypto game. There’s no one-size-fits-all portfolio but I figured sharing my thought process would help give you a good starting point.

Here’s how I would invest $10,000:

• $5,000 in Bitcoin

• $2,500 in Ethereum

• $2,500 spread across 3-5 micro-cap altcoins

As a crypto newbie, I know how tempting it is to dump all your money into the hottest coins that everyone is talking about. I’ve been there.

But as I've learned through the years, and as I share in my newsletters, the key to investing success is practicing good risk management. This is a fancy word for finding the right balance between taking risks and potential rewards.

I like to follow a barbell strategy and I think it’s a great way to manage your investing risk.

The barbell strategy is simple: invest in either extremely low-risk or high-risk assets, nothing in between.

Unlike a real barbell, it doesn’t have to be a 50/50 split. I like to do around 70% low-risk and 30% high-risk. Having this balance keeps me and my portfolio in check.

I consider Bitcoin and Ethereum as low-risk assets. They’re the foundation of my portfolio and my safety net.

On the other side, micro-cap altcoins are my lotto tickets.

Micro-cap is a category of tokens that have a tiny valuation (we’ll talk more about this next week).

These tokens are typically newer, less established, and much riskier. But they also have the most potential for massive gains.

Balancing my high-risk investments with low-risk investments gives me something to fall back on. And by limiting my high-risk exposure to around 30%, I protect my portfolio from ruin.

If one of those micro-caps goes to the moon, great. If it dumps to zero, I only take a minor hit compared to my overall portfolio.

Risk is different for everyone, but I hope this helps you start on your crypto investing journey.

Peace,

Fifty Sat

P.S.

Next week, we’ll talk about market caps and how that plays into your investing strategy.

Song of the Week