Crypto can feel like a whole different language. In fact, hearing words like blockchain, altcoin, staking, market cap, and cold wallet can sound confusing when you’re just starting out. However, I want you to know that you don’t have to be a financial genius to get started in crypto.
So, if you have heard about people making life-changing gains from crypto and you want to join the number, then you are most welcome. In this article, I will show you how to build a crypto portfolio from scratch. But first, for all my newbies reading this, let me explain what a crypto portfolio is.
KEY TAKEAWAYS:
- A crypto portfolio is a collection of different digital assets that you own.
- The first step to build your portfolio is to decide how much you are willing to invest.
- You will also need a solid understanding of the different types of crypto assets.
- While crypto can be intimidating at first, taking it step by step, building with intention, and staying consistent will take you far in no time.
What Is a Crypto Portfolio?
A crypto portfolio is a collection of different digital assets that you own. It is similar to a stock portfolio, but instead of shares of companies, you’re holding things like Bitcoin, Ethereum, Solana, or even stablecoins like USDC. You need a portfolio because putting all your money in one coin, even if it is Bitcoin, is risky.
Since crypto prices swing up and down more than in traditional markets, a portfolio is a proven way to spread that risk. Also, having a mix of crypto assets can expose you to different parts of the crypto ecosystem, like smart contracts, NFTs, decentralized finance (DeFi), and even gaming tokens.
How to Build Your Portfolio
Now that you understand what a crypto portfolio is and why it is important, here is how to get started on building one:
- Decide How Much You Can Start With
As a beginner, the amount of money you should invest is not set in stone. The right amount ultimately depends on you, your income, expenses, savings, and risk tolerance. Also, keep in mind that you don’t need millions to get started. You can begin your journey with as little as ₦10,000; what matters most is starting.
When it comes to crypto, it is generally advisable that you only invest what you can afford to lose. So, figure out a number that feels comfortable, and from there, you can grow it over time.
- Understand the Types of Crypto Assets
Before you throw money into coins, it’s good to know what you’re actually buying because cryptocurrencies fall into different categories. Here are the main ones to know:
- Blue chips or long-term giants: These are well-established coins with large market caps and strong track records, like Bitcoin and Ethereum. These are often considered core holdings for most portfolios. While they are not risk-free, they are less volatile than newer coins.
- Smart contract platforms: These are blockchains that compete with Ethereum or offer different features, like Solana, Avalanche, and Cardano.
- Utility and infrastructure tokens: These power things like decentralized storage, oracles, or scaling solutions. Common examples include Chainlink and Polygon.
- DeFi tokens: These run decentralized finance protocols like lending, borrowing, or trading without banks. Examples are Uniswap and Aave.
- Stablecoins: These are pegged to a stable value, like the US dollar. While you won’t make profits from price changes with stablecoins, they are safer, and they help balance your portfolio.
- Choose a Strategy
You have to know why you’re investing. Are you:
- Trying to grow wealth slowly over the next 5–10 years?
- Looking to flip coins quickly for fast gains?
- Interested in generating passive income?
For beginners, the safest strategy is long-term investing if you want to build something solid. That means buying quality assets and holding them through market ups and downs. A good strategy is to follow the 70/20/10 rule. Here, you put in 70% of the funds you want to invest in long-term holds, 20% in promising altcoins, and 10% in high-risk or small-cap gems.
Read Also – What are Crypto Assets?
- Buy Your Crypto
You can get your assets on:
- Centralized exchanges (CEXs): These are beginner-friendly platforms where you can buy, sell, and store crypto. Popular global ones include Binance, Coinbase, Kraken, KuCoin. If you are Nigerian, you can try our platforms like Koyn that support Naira and offer peer-to-peer (P2P) buying.
- Decentralized exchanges (DEXs): If you want more control or want to trade tokens not listed on big exchanges, you can use DEXs like Uniswap and PancakeSwap.
- Store Your Crypto Safely
Once you buy crypto, you need to store it, and you have two main choices:
- Hot wallets: These are connected to the internet and are good for small amounts of crypto or regular trading. Examples include Trust Wallet and MetaMask.
- Cold wallets: They are best for storing large amounts for the long term. Also, since they are not connected to the internet, they’re safer from hacks. They include Ledger Nano and Trezor
- Keep Track of Your Portfolio
To know how your portfolio is doing, you can use free tools like CoinGecko or CoinMarketCap for price tracking. Additionally, Delta or CoinStats can help you manage your entire portfolio across multiple wallets. That way, you stay informed without having to log in to multiple apps.
- Learn to Manage Risk
Crypto prices go up and down a lot, and that’s normal in the industry. To avoid being excessively affected negatively by the volatile market:
- Only invest what you can afford to lose.
- Don’t chase pumps or panic sell dips.
- Diversify across different coins.
- Have a long-term mindset.
- Explore Dollar-Cost Averaging (DCA)
You don’t need to invest all your money at once. In fact, it’s better not to. With Dollar-Cost Averaging (DCA), you invest a fixed amount, say ₦10,000, every week or month, no matter the price. Over time, you buy more when prices are low and less when prices are high, which averages out your cost and reduces your risk.
- Stay Updated (But Don’t Get Overwhelmed)
Follow trustworthy sources that can help you stay updated on the latest in the industry. While you don’t need to know everything, you need to always have an idea of the state of the market. However, make sure you always do your own research (DYOR) instead of swallowing every information you see, hook, line, and sinker.
Final Words
Yes, crypto can be intimidating at first. But if you take it step by step, build with intention, and stay consistent, you’ll be amazed at where you’ll be one year from now. Now that you have come to the end of this article, I hope it helps you take your first step with clarity and confidence.
You’ve got this!
References
- cointelegraph.com – Building a crypto portfolio with just $1,500: A beginner’s guide
- yellowcard.io – How to Build a Low-Risk Portfolio as a Trader
- fool.com – How to Create a Well-Balanced Crypto Portfolio
