Developing a Crypto Investment Strategy

As you have probably read recently, many of the cryptocurrencies have declined in value significantly.  This may represent a great buying opportunity for opportunistic investors.  While prices have been dropping, adoption and use of cryptocurrencies has continued to increase, although many barriers to widespread adoption still exist including a crowded field of many coins, volatility, association with criminal activity, usability, scalability and scams / hacks.  Investing in cryptocurrencies, while a bit risky, can provide diversification.  Due in large part to their volatility, cryptocurrencies also have the potential for very large returns.  I don't recommend you invest more than 1% of your investment portfolio in them if you are risk averse like me.  

If you have decided to invest some money in cryptocurrencies, here is a potential strategy to maximize your returns while moderating risk:

Invest in all the larger market cap coins (values as of November 15, 2018):

Bitcoin (BTC) - $96B

Etherium (ETH) - $18B 

Bitcoin Cash (BCH) - $7B*

Litecoin (LTC) - $3B

Invest more in BTC than others  (allocate your initial investment on a percentage basis by market cap)Continue small, systematic monthly investments into BTC and other large cap coins Buy and hold - be patient!Buy newer coins when available in small dollar amounts ($100 - $200 increments) - wait to see how newer coins shake out before making any big investmentsDiversification of risk across multiple coins is keyWhen investing in newer coins, look for those that have differentiating features beyond simply being a means of exchange (i.e. Etherium - smart contracts, Ripple - payment settlement) Monitor initial coin offerings, but be very selective in investing in these since many, if not most, fail to gain acceptance Monitor coins accepted by online retailers to see which coins are gaining more acceptance *Note that Bitcoin Cash is currently undergoing a "hard fork" in which the coin is essentially splitting into two.  There is some risk that one or both lose the interest of the community of miners, investors and day to day payment users and become obsolete, so this will bear watching.  Given the large market cap of BCH prior to the fork, it would seem that both new coins (Bitcoin ABC and Bitcoin SV) will have enough market interest to maintain their aggregate market cap, but only time will tell.
I like to do my investing on Coinbase, which is one of the cryptocurrency exchanges.  There are others, but I like Coinbase for easy connection to banking / automatic investments, good security and simple layout.  They also have a good selection of coins available to trade, including all the coins mentioned above. 
For more investing ideas, click here.

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