Crypto Basics

Portfolio Diversification - What It Is and How To Diversify Crypto Investments?

Learn everything about portfolio diversification and the best ways to diversify crypto investments, in this descriptive guide.
Token Metrics Team
6 Minutes
MIN

Portfolio diversification refers to the practice of dividing one's assets among various investments to minimize risk and increase returns. In the context of the crypto industry, this means allocating funds to different cryptocurrencies rather than concentrating all investments in one particular digital asset.

By diversifying one's portfolio, an investor can reduce the potential negative impact of a single investment performing poorly. Instead, the risk is spread across multiple investments, reducing the likelihood of significant financial losses. 

Additionally, by investing in a variety of cryptocurrencies, an investor can potentially take advantage of different market trends and movements, maximizing returns and ensuring more stable long-term gains.

What is a Well Diversified Crypto Investment Portfolio?

A well diversified crypto investment portfolio is a collection of various cryptocurrencies that are carefully selected to reduce the overall risk of the portfolio. This type of portfolio typically includes a mix of established cryptocurrencies such as Bitcoin and Ethereum, as well as some smaller or emerging cryptocurrencies that have the potential for high growth. 

The goal of diversification is to reduce the impact of market volatility on the portfolio by spreading the investment across multiple assets. Additionally, a well diversified portfolio may include investments in different sectors of the crypto market, such as DeFi, NFTs, and gaming, to further reduce risk and increase potential returns. 

Also, when constructing a diversified crypto portfolio, it is important to consider a range of factors, including the investment horizon, risk tolerance, and market conditions. This requires careful analysis of each individual cryptocurrency, as well as a thorough understanding of the broader market dynamics.

For instance, an investor with a shorter investment horizon may choose to allocate a larger portion of their assets to stablecoins, which are less volatile than other cryptocurrencies.

Another key consideration is the weighting of each cryptocurrency in the portfolio. This requires a deep understanding of the various risks and rewards associated with each investment, as well as an understanding of how different cryptocurrencies are likely to perform in different market conditions. To achieve optimal results, it is crucial to diversify across different asset classes and investment types.

Best Ways to Diversify Crypto Investments

A well diversified crypto investment portfolio is an important strategy for investors looking to navigate the rapidly changing and often unpredictable world of cryptocurrency. That is why every investor must know how they can diversify their crypto investments.

Here are some best ways to diversify your crypto investments:

Invest in Different Crypto Assets - One of the simplest ways to diversify your crypto portfolio is to invest in multiple cryptocurrencies. By investing in different assets, you can spread your risk across a variety of digital currencies.

Invest in Different Sectors: Another way to diversify your crypto portfolio is to invest in different sectors within the crypto industry. For example, you could invest in cryptocurrencies that are focused on privacy, or those that are designed for use in decentralized applications (dapps).

Use Different Investment Strategies: Diversification can also be achieved by using different investment strategies. For example, you could allocate some of your portfolio to long-term holdings, while using another portion for short-term trades.

Consider Alternative Crypto Investments: There are also alternative ways to invest in the crypto industry, such as investing in blockchain technology companies or mining operations. These investments can provide exposure to the industry without relying solely on the performance of individual cryptocurrencies.

Keep an Eye on Market Trends: Finally, it's important to stay informed about market trends and changes in the crypto industry. By staying up-to-date on the latest developments, you can adjust your investment strategy and ensure that your portfolio remains well-diversified.

Benefits of Crypto Portfolio Diversification

Portfolio diversification is widely considered to be one of the most effective ways to protect one's assets in the crypto market. Here are some key benefits of crypto portfolio diversification:

  • Risk Reduction: By diversifying your portfolio across multiple cryptocurrencies, you can reduce the overall risk of your portfolio. This is because if one asset underperforms, the negative impact on your portfolio will be minimized.
  • Potential for Better Returns: A well-diversified portfolio can potentially provide better long-term returns by allowing you to take advantage of different market trends and movements.
  • Better Investment Decisions: Diversification can help you avoid investing in overvalued or underperforming assets, leading to better investment decisions.
  • Hedge Against Market Volatility: A diversified portfolio can help you hedge against potential market volatility, making it a crucial strategy for long-term investors seeking stability and consistent returns in the crypto industry.

By keeping these benefits in mind, investors can create a well-diversified crypto investment portfolio that maximizes returns while minimizing risks.

Risks Associated with Crypto Portfolio Diversification

Here are some key risks associated with crypto portfolio diversification:

Lower Potential Returns: Diversification may limit the potential returns on your investment portfolio. As you spread your investments across multiple assets, you may not be able to fully capitalize on the returns of any one asset that performs exceptionally well.

Higher Transaction Costs: Diversification can lead to higher transaction costs as you need to buy and sell multiple assets. This can eat into your profits and make it more difficult to earn a significant return on your investment.

Poorly Performing Assets: Holding a diversified portfolio may also mean holding assets that perform poorly or underperform. This could lead to subpar returns or even losses if an asset significantly underperforms.

Overexposure to Certain Sectors: Diversification does not always guarantee a lower risk, as your portfolio may still be overexposed to certain sectors or industries within the crypto industry. This can increase your overall risk, particularly if these sectors experience a downturn.

By being aware of these risks, investors can take steps to mitigate them and create a well-diversified crypto investment portfolio that balances the potential for returns with the associated.

Also Read - Future of crypto in the next 5 years

Is Diversifying Crypto Portfolio a Good Strategy?

Diversifying crypto assets is not only recommended, but it is also a necessary strategy for investors who want to reduce the risks associated with investing in cryptocurrencies.

Cryptocurrencies are known for their high volatility, and investing in only one or a few can lead to significant losses if the market goes down. By diversifying your portfolio, you can spread out your risk and potentially increase your chances of long-term success. 

However, it's important to note that diversification is not a one-size-fits-all strategy, and investors should do their own research and analysis to determine the best diversification strategy for their individual goals and risk tolerance.

Conclusion

In conclusion, diversification is a key strategy for any successful investor, and the crypto industry is no exception. By diversifying your crypto investments, you can spread your risk across a variety of assets and reduce the impact of market volatility. 

While diversification cannot eliminate risk entirely, it can help to mitigate it and increase the chances of long-term success. With careful planning and attention to market trends, you can build a well-diversified crypto portfolio that is positioned to weather the ups and downs of this exciting and rapidly evolving industry.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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Token Metrics Team
Token Metrics Team

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Research

Crypto Indices - See What You Own: Holdings Treemap, Table, and Transactions Log (2025)

Token Metrics Team
5
MIN

If you’ve ever bought a “basket” of coins and then wondered what you actually hold, you’re not alone. The Token Metrics Global 100 solves that by pairing a rules-based strategy with radical visibility: an interactive holdings treemap, sortable table, and a real-time transactions log—so you can see what you own at all times. This transparency sits on top of a simple idea: a top-100 crypto index when markets are bullish and stablecoins when they’re not, with weekly rebalancing and one-click buy at launch. The result is clarity for hands-off allocators and discipline for active traders—without spreadsheets or manual rebalances.

→ Join the waitlist to be first to trade TM Global 100.

Why Transparency Matters in October 2025

Today’s crypto investor expects more than a chart and a headline weight. You want to audit your index: which coins, what size, and what changed after each rebalance. That’s exactly why we ship three visibility layers on day one: Gauge → Treemap → Transactions Log—plus a classic holdings table for power users.

In practical terms, a holdings treemap shows proportional weights at a glance, a table lets you sort and export details, and a transactions log chronicles every add/trim/exit during rebalances and regime switches. Together, they answer the search intent behind “crypto index holdings” and “weekly rebalancing” with an immediately scannable source of truth.

How the TM Global 100 Index Works (Plain English)

  • Regime switching: When our market signal is bullish, the index holds the top 100 assets by market cap. When bearish, it exits to stablecoins and waits for a re-entry signal.
  • Weekly rebalancing: We adjust constituents and weights weekly to reflect updated rankings—so the index stays aligned with the market.
  • Transparency: You’ll see a Strategy modal (rules at a glance), a market signal gauge, an interactive Holdings treemap & table, and a Transactions log that records rebalances and regime shifts.

What you’ll see on launch: A price tile, “tokens: 100,” “rebalances weekly,” and a Buy Index flow that can complete in about 90 seconds, end-to-end.

See the strategy and rules. (TM Global 100 strategy)

Benefits at a Glance (Why This Beats DIY)

  • Time saved: Skip ranking lists, manual screeners, and cross-exchange rebalances.
  • Lower execution drag: A single indexed flow helps reduce the slippage and fees you’d pay hopping between many tokens.
  • No missed cycles: Weekly rebalances help capture changes in the top-100 while the regime switch avoids guesswork when markets turn.
  • Full visibility: Treemap + table + transactions let you see exactly what changed and why—no black boxes.
  • Rules over vibes: A consistent methodology can reduce emotional decisions during drawdowns and market euphoria.

Step-by-Step: How to Get Early Access (Waitlist)

  1. Open the Indices hub and select TM Global 100. (Token Metrics Indices hub)
  2. Join the waitlist with your email to get launch-day access and updates.
  3. (Optional) Connect your wallet so you’re ready to buy at launch.
  4. On launch: Open TM Global 100, review the Gauge → Treemap → Transactions, and tap Buy Index.
  5. Confirm the buy: You’ll see estimates for fees/slippage and the current token mix.
  6. Track your position: Your holdings and every rebalance appear in My Indices and the Transactions Log.

→ Join the waitlist to be first to trade TM Global 100.

Decision Guide: Is This Right for You?

  • Hands-Off Allocator: Want “own the market” exposure and automatic upkeep. Consider if you dislike micromanaging.
  • Active Trader: Want a disciplined core that moves to stablecoins in bears while you take satellite bets elsewhere.
  • TM Member/Prospect: Already trust Token Metrics research and want rules-based execution with full visibility.
  • Starter Portfolio Builder: Prefer a single decision over 20+ token buys and periodic DIY reweights.
  • Transparency Seeker: You won’t tolerate black-box products; you want a real transactions log and holdings you can audit.
  • Tax-Aware Rebalancer: You’d rather not run frequent piecemeal trades yourself.
  • Mobile-First User: Want a fast, on-page buy flow instead of tab-hopping across venues.
  • Analytics Fan: Enjoy comparing weights and changes in the treemap after each weekly rebalance.

FAQs

What is a crypto index with a holdings treemap?

It’s a rules-based basket of cryptocurrencies where you can visually inspect weights via an interactive treemap, alongside a sortable table and a transactions log that records every rebalance and regime switch.

It’s a rules-based basket of cryptocurrencies where you can visually inspect weights via an interactive treemap, alongside a sortable table and a transactions log that records every rebalance and regime switch.

Weekly. Rebalances update constituents/weights to reflect current top-100 rankings; separate regime switches can also move the portfolio between tokens and stablecoins when the market signal changes.

What triggers the move to stablecoins?

A proprietary market signal. When bearish, the index exits tokens to stablecoins; when bullish resumes, it re-enters the top-100 basket.

Can I fund with USDC or fiat?

At launch, funding/settlement options surface based on your connected wallet and supported chains. USDC payout is supported on selling; fiat on-ramps may be added later.

Is the wallet custodial?

No. The embedded wallet is self-custodial—you control your funds.

How are fees shown?

Before you confirm, the buy flow surfaces estimated gas, platform fee, max slippage, and min expected value.

How do I join the waitlist?

Open the Indices hub, navigate to TM Global 100, and add your email. You’ll be notified on launch with a direct link to buy.

Security, Risk & Transparency

  • Self-custody: Embedded smart wallet with user control.
  • Operational clarity: Weekly rebalances; regime logic documented in the Strategy modal.
  • Fee & slippage preview: All surfaced before you confirm a trade.
  • Data integrity: Holdings treemap + table and transactions log reflect each executed change.

Regional notes: Availability and on-ramps can vary by jurisdiction. Crypto is volatile and can lose value. Past performance is not indicative of future results. This article is for research/education, not financial advice.

Conclusion

Token Metrics Global 100 is built for investors who want broad market exposure and the receipts to prove what they hold—treemap, table, and transactions on every rebalance. If you value rules, discipline, and transparency, join the waitlist and be ready on launch day.

Research

Crypto Index vs DIY Basket: Time, Slippage, and Missed Rebalances (2025)

Token Metrics Team
5
MIN

Building your own crypto basket sounds simple—until you’re juggling 10–50 tickers, spreadsheets, rebalance rules, spreads across chains, and the constant fear of missing regime turns. A crypto index removes that manual grind: TM Global 100 holds the top 100 assets when the market is bullish and moves fully to stablecoins when it’s not, with weekly rebalancing and full transparency of holdings and transactions. One click to buy, zero maintenance to keep up.

→ Join the waitlist to be first to trade TM Global 100.

Why Indices Matters in October 2025

In 2025, time and execution quality are alpha. Manually maintaining a DIY basket multiplies complexity: fragmented liquidity, multiple wallets, chain fees, and coordination across exchanges—all while markets move. A rules-based index compresses that overhead into a single, auditable product with pre-declared logic and scheduled upkeep.

Definition (snippet-ready): A crypto index is a rules-based basket of digital assets that rebalances on a set schedule and/or when market conditions change, so you don’t have to micromanage individual coins.

Traders searching “DIY crypto basket,” “regime switching,” or “weekly rebalancing” usually want one thing: broad exposure without the constant maintenance and the regret of missed rebalances. That’s the exact problem Token Metrics Global 100 addresses with weekly updates and regime switching to stablecoins when signals turn bearish.

How the TM Global 100 Index Works (Plain English)

  • Regime switching: When signals are bullish, the index holds the top 100 by market cap; when bearish, it exits fully to stablecoins to wait for re-entry.
  • Weekly rebalancing: Aligns weights and constituents with updated rankings; regime changes can also trigger full portfolio shifts.
  • Transparency: Strategy modal explains selection & rebalancing rules; Holdings show a treemap/table; Index Transactions log all changes.

What you’ll see on launch: Price tile, signal gauge, tokens=100, “rebalances weekly,” contract address, and a Buy Index button with a ~90-second live demo flow showcased in launch content.

→ See the strategy and rules. (TM Global 100 strategy)

Benefits at a Glance (Why This Beats DIY)

  • Time saved: Replace multi-exchange shopping, wallet hops, and manual allocations with one click.
  • Fewer missed rebalances: Weekly cadence + visible transactions log reduce the cost of “I’ll do it tomorrow.”
  • Slippage discipline: Centralized execution with declared slippage/fee previews helps contain surprises vs piecemeal orders.
  • Regime switching: Codified “risk-off” behavior into stablecoins during bears, so you don’t have to white-knuckle exits. (No performance promises.)
  • Transparency: Strategy modal → Holdings treemap/table → Transactions log—see exactly what you hold and when it changed.

Proof cues (What you’ll see): Gauge (market signal) → Treemap (allocations) → Transactions Log → ~90-second Buy flow.

Step-by-Step: How to Get Early Access (Waitlist)

  1. Open the Token Metrics Indices hub and select TM Global 100.
  2. Add your email to the waitlist so you’re first in line at launch.
  3. (Optional) Connect your wallet—our embedded, self-custodial smart wallet supports major chains.
  4. On launch day, you’ll see the price tile, signal gauge, and “Buy Index.”
  5. Review the strategy, expected fees/slippage, and holdings; confirm to purchase.
  6. Track your position in My Indices; rebalances and any regime switches will appear in the transactions log.
→ Join the waitlist to be first to trade TM Global 100.

Decision Guide: Is This Right for You?

  • Hands-Off Allocator: Want broad exposure without micromanaging? Consider a rules-based core that updates weekly.
  • Active Trader: Keep your bets, but use an index core that may step to stablecoins during bears.
  • TM Member/Prospect: Prefer transparent holdings, logs, and a simple buy/sell flow.
  • Time-Strapped Professional: Reduce ops work (wallets, slippage math, spreadsheets) to nearly zero.
  • New to Crypto: Learn with training wheels—strategy modal, tooltips, and clear risk language.
  • DIY Purist: If you enjoy tinkering with weights daily, DIY could still fit—just know weekly index upkeep is handled for you.

FAQs

What is a crypto index?

A rules-based basket of assets with scheduled rebalancing and, in TM Global 100’s case, a regime switch between top-100 exposure and stablecoins.

How often does the index rebalance?

Weekly, with additional full-portfolio switches when the market regime changes.

What triggers the move to stablecoins?

A proprietary market signal. When bearish, the index exits tokens into stablecoins and waits for a bullish re-entry.

Can I fund with USDC or fiat?

Funding options surface based on your connected wallet and supported chains; USDC payouts are supported on selling. (Stablecoin entry may come later.)

Is the wallet custodial?

No. The embedded wallet is self-custodial; you control funds.

How are fees shown?

The Buy flow shows estimated gas, platform fee, max slippage, and minimum expected value before you confirm.

How do I join the waitlist?

Visit the Indices hub → TM Global 100 → enter your email to get notified and first access at launch.

Security, Risk & Transparency

  • Self-custody: You transact via an embedded, self-custodial smart wallet.
  • Visibility: Strategy modal, Holdings treemap/table, and Transactions log make changes auditable.
  • Fee & slippage preview: See estimated gas, platform fee, max slippage, and minimum expected value before confirming.
  • Regime logic limits: Signals can be wrong; markets can gap; weekly rebalances can’t eliminate risk.
  • Region/chain notes: Supported chains surface in-product; availability and options may vary.

Crypto is volatile and can lose value. Past performance is not indicative of future results. This article is for research/education, not financial advice.

Conclusion

If you’ve ever missed a rebalance or watched slippage eat into returns, Token Metrics Global 100 can help standardize the work: rules-based logic, weekly updates, and a visible log of everything that changed. Join the waitlist to be first to trade, and make a disciplined index your core.

→ Join the waitlist to be first to trade TM Global 100.
Research

Regime Switching in Crypto: Participate in Upside, Sit Out Drawdowns (2025)

Token Metrics Team
5
MIN

Timing crypto cycles is inherently challenging. Volatility in the crypto markets can lead to sharp swings—either capturing gains during bull runs or avoiding deep drawdowns during unfavorable trends. A regime switching crypto index offers a systematic way to adapt to changing market conditions, using rules-based allocations that switch between risk-on assets and stablecoins accordingly. Token Metrics offers tools to help analyze these strategies with transparency and real-time insights.

Why Indices Matter in October 2025

Crypto markets tend to operate in distinct regimes—periods of momentum followed by corrections that can reverse gains quickly. Investors and analysts seeking to implement regime switching or weekly rebalancing frameworks value simplicity and clarity. These approaches help in maintaining discipline, managing risks, and capturing market trends effectively.

Definition of Regime Switching in Crypto

Regime switching in crypto refers to a rules-based investment method that adjusts portfolio exposure based on prevailing market conditions. Typically, this involves rotating into a diversified basket of tokens in bullish phases and shifting into stablecoins during bearish trends, thus managing risk while seeking to ride upward trends.

Why Now: The Rationale for Regime Switching

  • Cycle Asymmetry: Capturing upward trends while limiting downside drawdowns can influence long-term outcomes positively.
  • Operational Efficiency: Automated, rules-based rebalancing reduces errors and slippage tied to manual adjustments across multiple tokens or exchanges.
  • Transparency: Real-time insight into holdings, rebalancing rationale, and transaction history fosters trust and clarity.

How the TM Global 100 Index Works (Plain English)

This index employs regime switching principles: during bullish periods, it holds the top 100 crypto assets by market cap; during bearish times, it exits into stablecoins and waits for buy signals. The index performs weekly rebalancing based on updated rankings, liquidity, and supply metrics. Transparency is maintained through clear strategy rules, gauges, Treemap views, and detailed transaction logs.

Benefits at a Glance (Why This Beats DIY)

  • Rules, not vibes: Automated logic minimizes emotional decision-making.
  • Fewer operational mistakes: Single, streamlined flows replace manual multi-step trades.
  • Discipline in switching: Full rotation into stablecoins at bearish signals reduces hesitation and second-guessing.
  • Cost visibility: Estimated gas, platform fees, and expected minimum value are shown upfront.
  • Full transparency: Holdings treemaps and transaction histories keep you informed.
  • Consistent cadence: Weekly updates ensure alignment with market trends.

Step-by-Step: How to Get Early Access (Waitlist)

  1. Visit the Token Metrics Indices hub.
  2. Find the TM Global 100 index card and tap “Join Waitlist”.
  3. Add your email to receive launch notifications.
  4. Optionally, connect your wallet in advance to streamline onboarding on launch day.
  5. On launch day, you will receive an email when the index opens for trading. The interface features gauges, strategy details, and holdings for instant review.
  6. Complete the purchase of the index in about 90 seconds by confirming your wallet, reviewing potential fees, and confirming the buy.
  7. Track your position within “My Indices” once active.

Join the waitlist to be first to trade TM Global 100.

Decision Guide: Is This Right for You?

  • Hands-Off Allocator: Ideal for those seeking broad market exposure with minimal management.
  • Active Trader: Useful as a core strategy with rules-based rebalancing, supporting satellite bets.
  • Token Metrics Member/Prospect: For users who value transparent, research-backed rules over discretionary choices.
  • Crypto Newcomer: Simplifies entry with one-button buy, weekly updates, and clear rules.
  • Time-Constrained Pro: Reduces operational overhead while maintaining clarity and predictability.
  • Skeptical of Forecasts: Prefers systematic processes over relying on predictions or forecasts.

FAQs

What is a regime switching crypto index?

A rules-based portfolio that allocates to a diversified token basket during bullish phases and switches to stablecoins during bearish conditions, based on predefined signals. Token Metrics implements this with a top-100 universe and full stablecoin rotation in downturns.

How often does the index rebalance?

It rebalances weekly to reflect changes in rankings and liquidity. Significant regime changes can occur outside the schedule when market signals trigger a switch.

What triggers the move to stablecoins?

A proprietary market signal prompts the index to exit token positions and move into stablecoins during bearish phases, waiting for a bullish signal to re-enter.

Can I fund with USDC or fiat?

Funding occurs via an embedded, self-custodial wallet supporting major chains. USDC payouts are supported when selling. Funding options depend on your wallet and region.

Is the wallet custodial?

No. It is self-custodial, giving you control of keys and funds.

How are fees shown?

Before confirming a trade, estimated gas, platform fee, slippage, and expected minimum value are displayed.

How do I join the waitlist?

Visit the Token Metrics Indices hub, open TM Global 100, and tap “Join Waitlist”. You will be notified at launch.

Security, Risk & Transparency

  • Self-custody is prioritized: You control your keys and funds.
  • Transparency is built into the process: Fees, holdings, and transaction logs are visible before and after trades.
  • Market signals are based on rules; sudden gaps and spreads can impact outcomes.
  • Supported regions and asset options may vary due to geography.

Crypto markets are volatile and can fluctuate rapidly. Past performance does not predict future results. This article aims to educate and inform, not provide financial advice.

Conclusion

For a disciplined, transparent approach to broad crypto exposure that adapts to market regimes, the TM Global 100 index offers a rules-based platform with weekly rebalancing and full visibility. It enables investors to focus on allocation without the stress of micromanagement.

Join the waitlist to be first to trade TM Global 100.

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