Hedge fund manager Brian Kelly has given advice to traders on how to build their crypto portfolio, arguing that it’s a mistake to just invest in bitcoin.
Speaking on CNBC’s ‘Fast Money,’ the founder of BK Capital Management, said that even though bitcoin is the biggest cryptocurrency in the market it’s not a sufficient way to play the industry.
“[Cryptocurrency] is a world onto itself,” he added. “It’s its own market. And just like the stock market it has its own organisational structure.”
According to the report, this organisation structure consists of coins that have market values above $10 billion, such as bitcoin, ethereum, ripple, bitcoin cash, and litecoin; medium-sized coins with values between $1 and $10 billion, including the likes of NEO, EOS, IOTA, and NEM; and small-capped coins below $1 billion, such as Steem and Siacoin.
Kelly added:
“It’s not just the size of the coin, but how you use it.”
Such is Kelly’s faith in the crypto market that he was reported last month as stating that he had put 90 percent of his money into digital currencies. However, at the time, he said:
“But that’s not for everybody. I’m making a big bet.”
In Kelly’s opinion, traders should invest in an array of different products when starting a cryptocurrency portfolio to make the most of it. Investors should put 30 percent into digital currencies and 30 percent into platforms such as ethereum and ethereum classic.
“That’s where the new apps are coming,” he explained. “On all of these platforms, new things are being developed. Thousands of people are building on top of it.”
He added that 20 percent should be invested into privacy coins such as monero, dash and zcash; 10 percent into apps, including Metal, a computer app, and Salt; five percent in exchanges such as Binance, Zerox, and Polymath; and another five percent in hybrid platforms, including ripple and stellar.
Speaking of their dual functionality, Kelly said:
“What’s interesting about these, not only can they be used as a pure currency, but you can build on top of them.”
With interest in the market continuing and more altcoins building on their market values traders are invariably going to turn their attention to other coins for their investment purposes.
