What is crypto portfolio diversification?

What Is Crypto Portfolio Diversification?

Diversification means spreading your capital across more than one asset (e.g. Bitcoin, Ethereum, and a few others) so that a crash in one does not wipe out your whole portfolio. It can smooth returns but does not eliminate risk: crypto assets often move together in big sell-offs. Diversify across different types (e.g. large caps, different use cases) rather than many similar coins. Do not over-diversify into unknown tokens. In India, each asset you sell is a separate taxable event; keep records for all.