When you’re putting together an investment portfolio of any kind, diversification is the key. It could be property, stocks or cryptocurrency, the more diverse your portfolio is, the better it will perform in the face of negative market conditions.
If you’re building your own crypto portfolio, you’re no doubt aware of just how many options are available. Deciding what to include in your portfolio can be tough, but it’s something you need to get right if you want to succeed. Check out the guide below to learn why you should include memecoins like Shiba Inu (SHIB) in your crypto portfolio.
What Are Memecoins?
If you’re new to the world of cryptocurrency, the word memecoin might sound a little strange, or even completely bizarre. We all know what memes are, internet jokes that we see repeated across social media channels and in various different formats. What could these possibly have to do with crypto?
Memecoins are cryptocurrencies that have been inspired by these internet jokes. Some of the most famous examples include Dogecoin and Shiba Inu, but there are hundreds more, such as Milady, Bonk and BOB.
While cryptocurrencies like Bitcoin and Ethereum have been designed with specific goals in mind, memecoins are more for entertainment. However, that doesn’t mean they should be discounted when exploring investment options. Some memecoins are incredibly valuable, with Dogecoin and Shiba Inu the eighth and seventeenth largest coins by market cap.
Are Memecoins a Good Investment Choice?
Cryptocurrencies, by and large, are unpredictable assets. Prices can fluctuate wildly over very short periods of time and, despite the technology prioritising decentralisation, can be influenced by external global events.
Memecoins take this unpredictability to a whole new level. As these assets are conceived, launched and then supported by internet communities built around a joke or meme, they can be incredibly successful for a short period of time before fading off into complete obscurity.
This might not sound like a particularly wise investment choice so far, but there is potential in memecoins, it’s all a matter of timing. Dogecoin is the perfect example, this memecoin’s price went through the roof when it was picked up and promoted by controversial billionaire Elon Musk. Investors who were holding Dogecoin in their portfolio when this happened will have been laughing all the way to the bank.
This is one reason why it’s always worth holding memecoins in your portfolio. Anything can happen in the world of crypto, and a coin that is virtually worthless one day could be a hot commodity the next.
How to Choose the Right Memecoins
It’s certainly worth considering including memecoins in your crypto portfolio. However, knowing what memecoins to choose can be difficult. There are hundreds of options out there, how do you know which is the best choice for your portfolio?
First, browse through crypto charts and identify memecoins. You’ll spot Dogecoin and Shiba Inu straight away, with these top coins closely followed by memecoins such as Baby Doge Coin and Dogelon Mars. You don’t want to go for something too obscure, as coins that have fallen too far may never be able to recover.
Dogecoin is always a good choice, as you never know when Elon Musk might decide to reignite his interest. Keep your eye out for new memecoins too. These assets have a tendency to perform exceptionally well at their launch, so this can be the perfect time to buy, hold for a short while and then sell for a profit.
What Else Should Be in Your Portfolio?
As we mentioned at the start of this article, diversification is key when it comes to putting together a solid crypto portfolio. You don’t want a portfolio stacked with just memecoins, you’re going to need some other options in there as well.
All portfolios should have an established cryptocurrency like Bitcoin or Ethereum. If you can, have both. These are by far the most stable assets and can help secure your portfolio in what can be a volatile and unpredictable market.
A stablecoin can also be a good choice. These are tied to a fiat currency such as the US dollar, making them much more stable than standard cryptocurrencies.
You can also include a newer, up-and-coming cryptocurrency in your portfolio. Often, these are backed by exciting new technology and offer improved features and functionality when compared to older, established coins like Bitcoin. Newer coins to consider include XRP, Cardano and Solana.
Storing Your Portfolio
When it comes to storing your portfolio, a crypto wallet is the best choice. These are digital wallets that can be used to house your digital assets safely and securely. Hot wallets are connected to the internet, making it easier to transfer coins. Cold wallets are not connected to the internet. These are less practical but much safer and are not at risk of cyberattacks.
Memecoins can seem intimidating, a result of their volatility and unpredictability. However, it’s these attributes that make them a good choice for your portfolio, buy and sell at the right time and you could make a tidy profit. Always remember to diversify, don’t keep only memecoins in your portfolio.