Mining
- Approximately 20% of well balanced portfolio.
- Generates weekly, monthly, or quarterly income.
- Income will fluctuate based on factors such as the current BTC price, electricity and other costs.
- Bitcoin mining involves using specialized computer hardware to solve complex mathematical problems, which helps validate and secure transactions on the Bitcoin network. Miners are rewarded with newly minted bitcoins and transaction fees for their efforts.
- Compared to an annuity in traditional finance.
Insurance
- Approximately 5% of a well balanced portfolio.
- Used as a risk management strategy to protect your initial investment.
- Compared to insurance policies in traditional finance.
Options
- Approximately 50% of a well balanced portfolio.
- Long term investment.
- Options are financial derivatives that give traders the right, but not the obligation, to buy call options or sell put options at a specific price on or before a certain date, which is called the expiration date.
- Options can be used to hedge against price fluctuations.
- Options provide additional flexibility and risk management tools in the cryptocurrency market, allowing us to participate in price movements, and limit exposure to volatility.
- As long as you keep an active insurance policy and pay the funding rates to rollover your contracts, options can be held on to indefinitely.
- Compared to a bond in traditional finance
Futures
- Approximately 20% of a well balanced portfolio.
- Futures are financial contracts that obligate the buyer to purchase their long position or the seller to sell their short position at a predetermined price on a specified future date.
- Can use futures to hedge against price fluctuations in the cryptocurrency market, providing a way to mitigate risk in their overall portfolio.
- Futures can be used to manage risk associated with holding bitcoin positions, providing flexibility in adjusting exposure to the cryptocurrency market based on market conditions.
- Compared to stocks in traditional finance.
Floating Cash
- Approximately 4% of a well balanced portfolio.
- Floating cash refers to having liquid funds readily available that can be moved or deployed as needed and when needed.
- Allows us to take advantage of favorable market conditions without delay.
- Compared to a traditional money market account.
Alt Coins
- Approximately 1% of a well balanced portfolio.
- Altcoins, short for alternative coins, refer to any cryptocurrency other than Bitcoin.
- These digital currencies are created using blockchain technology and vary widely in their features, purposes, and underlying technologies.
- Altcoins emerged as alternatives to Bitcoin, aiming to address perceived limitations or introduce innovative features such as faster transaction speeds, enhanced privacy, or smart contract functionality.
- High risk/high reward.
- Compared to emerging stocks in traditional finance.
Investing in cryptocurrency involves significant risks and should be approached with caution. Cryptocurrency markets are considered emerging and highly volatile, characterized by rapid price fluctuations. It is important to recognize that investing in cryptocurrencies carries inherent risks.
Past performance is not indicative of future results. The historical performance of a cryptocurrency or the overall market is not a reliable indicator of future performance. Market conditions can change rapidly, and past success does not guarantee future gains.
Investors should carefully consider their risk tolerance, investment objectives, and financial situation before investing in cryptocurrency. It is recommended to conduct thorough research and seek advice from qualified financial professionals before making any investment decisions.