How much crypto should you have in the wallet?

Here is some advice about your wallet: do not invest in anything that you can’t afford to lose. Bitcoin, like all other cryptocurrencies, is extremely volatile and you should take some care when investing. Click here and see how to diversify your portfolio.

Let’s suppose that you have some money that you’d like to put on crypto, but don’t know how much of your patrimony you should put at risk.

There are some studies that could help you solve that matter.

What specialists say

According to a Yale study, every portfolio should have at least 6% on Bitcoin. The reasons are simple: despite their high volatility, digital assets possess high potential return than any other kind.

The study says that even the most skeptical individuals should have at least 4% of their portfolio on crypto. In the long term, all of them should testify that cryptocurrencies are much more profitable and safer than any other traditional asset.

Vrishin Subramaniam, the founder of CapitalWe, said that you should invest something between 2–5% of your net worth. Since crypto’s track record is somewhat short in comparison with traditional markets, users should investigate it regularly to check its behavior.

How much is inside the wallet

There are two main types of crypto wallets: hot and cold.

Hot wallets are more convenient because you can access your coins very fast and make short-term transactions and investments. However, hot aren’t as safe as the other kind.

Cold are excellent for long-term investments: they can be accessed through hardware wallets, such as Trezor or Ledger, or paper wallets. They aren’t as convenient as hot but are much safer.

If you’re going to invest for the long-term, we’d recommend using hardware wallets or paper wallets. The same goes if you’re going to put great sums of money into it. On the other hand, if you’d like to invest modestly and wishes to make short-term operations and such, hot are the way to go.

You can also get a small amount of your cold coins into a hot to diversify your operations and portfolio. But be advised — the risks are greater if you’re not just “hodling” your coins!

The bottom line

Since crypto doesn’t have any governmental control over it and all your safety depends solely on you, these tips could help you a lot when placing your bets towards it.

Big amounts of money should be stored safely into hardware or paper wallets; however, if you’re more aggressive, hot wallets are more convenient and easier to use.

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