5 Key Signs You’re Too Heavily Invested In Crypto

Asset allocation is a crucial but often overlooked part of any good investment strategy. Smart asset allocation will ensure you’re diversified enough to minimize your overall portfolio risk as much as possible. A big part of that is making sure you aren’t over-invested in any one security or asset class, especially riskier ones.

Check Out: 8 Best Cryptocurrencies To Invest In for 2024
Long Term: One Smart Way To Grow Your Retirement Savings in 2024

Cryptocurrency, despite its popularity, remains volatile and risky. It has certainly offered some outsized returns — Bitcoin alone minted a host of new millionaires — but it’s important to be certain it isn’t taking up too much space in your portfolio. GOBankingRates spoke to Kadan Stadelmann, CTO of the blockchain platform Komodo, to find out five key signs that you’re too heavily invested in crypto. 

Obsessive Monitoring

“You find yourself constantly checking cryptocurrency prices, even multiple times an hour, and it significantly affects your daily routine and productivity,” Stadelmann said. If this sounds like you, take it as a warning sign. Checking on prices too often tends to give you an overstated sense of how important a change in price is, which can lead to bad decision making. 

The truth is, any publicly traded asset is going to experience some price volatility. That’s perfectly normal and even healthy. Crypto is particularly volatile — the price of Bitcoin has ranged from around $24K to over $70K just over the last 52 weeks — which amplifies the negative effects of over-monitoring

Simplified Investing: I’m a Financial Advisor: These 5 Index Funds Are All You Really Need

Emotional Overreaction

“Your mood fluctuates significantly based on the movement of cryptocurrency prices. A drop in prices might cause anxiety or panic, while a rise might lead to euphoria,” Stadelmann said. This is a dangerous sign because an excess of emotion dramatically increases your chance of making a mistake that could result in a serious loss of your savings. Fear can make you sell when prices drop quickly, locking in a loss that you might have avoided by simply holding through the downturn. Conversely, the rush of high prices might lead you to allocate even more of your savings to crypto, thereby unbalancing your…