The host of the Shark Tank podcast believes that in a volatile market it is advisable to diversify the crypto portfolio by distributing investments according to the rules of traditional markets.
Kevin O’Leary declaredthat, when forming a cryptocurrency portfolio, it uses the same strategy as in the stock market.
“11 sectors of the economy are represented in the S&P 500. The theory tells you: never invest more than 20% in any one of the sectors, and no more than 5% in any of the stocks or bonds. This is the diversification that sovereign funds use,” explains an experienced investor.
The host uses the same strategy to invest in Bitcoin (BTC), Ether (ETH), USDC stablecoin, Polygon’s second layer scaling solution (MATIC), and Solana’s first layer blockchain protocol (SOL).
“I think cryptocurrencies will become the 12th sector of the economy in ten years. This means that I will be able to invest up to 20% of my operating capital in the cryptocurrency market and diversify my portfolio. Now I invest the most in Ethereum and Bitcoin. I have big positions in USDC and FTX and I am a big fan of what Sam Bankman-Freed is doing. Slightly less invested in Polygon, I liked his attempt to lower gas fees, which makes a lot of sense for India and other developing countries. I love what’s going on in all Solana projects.”
O’Leary stressed the particular importance of diversifying assets in a portfolio during times of volatility:
“All investments work only in conditions of diversification. Eight weeks ago my portfolio was at 21%, now it’s down about 18%. There has been a big correction in the market, but you have to get used to it.”
The billionaire is not opposed to the government once and for all clarifying the regulation of stablecoins and allowing the market to compete freely within the boundaries of the rules. According to him, he could then invest a significant part of the capital in the digital asset market, backed by reserves in fiat currency.
Last month, Real Vision CEO Raoul Pal said that cryptocurrencies like Ethereum will deprive Bitcoin of its leadership in the future.
Source: Bits
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