Would it be a good idea to have several different *coin to protect oneself from fluctuations?

I'm interested in *coin, but I'm afraid of sinking money into something out of idle curiosity and then losing that money to value fluctuations. Would it be a good idea to have several different *coin (lite, doge, idk what else there is) so that the fluctuations balance each other?

Have different *coin in the past gained and lost value in 'lockstep', or totally independent or inversely?

I'm aware that I would also loose the chance to gain money from course fluctuations, but I don't that's something to loose sleep over.

mart

Posted 2014-11-04T11:25:11.850

Reputation: 393

feel free to add appropriate tags! – mart – 2014-11-04T11:25:24.213

Answers

I don't see how different coins would protect against volatility, as Bitcoin is by far the leading cryptocurrency, and the others (even all of them combined) are really totally insignificant in terms of market cap and trading volume.

If you want to protect against volatility (given that you measure volatility in terms of value expressed in fiat currency), there's two options:

use Coinapult Locks
keep part of your money in fiat

Simple as that. Seriously, just not investing part of your money in something is the best and easiest way to suppress its volatility.

RocketNuts

Posted 2014-11-04T11:25:11.850

Reputation: 714

what do I care for total trade volume when I have (say) 1 Btc, 1 litecoin, 1 dogecoin? – mart – 2014-11-04T12:01:18.477

+1 for coinapult. At first glance that seems interesting (I'm Tom from their example page). Just don't know yet how to trust them. – mart – 2014-11-04T12:07:06.090

You should see *coin as a very high risk asset. The strategy "diversify your investment" only works on regular stocks since people generally see the markets rising over large amounts of time on established companies. (The fluctuations average in accordance to the law of large numbers)

It is much more risky to invest in something completely new no-one has genuine, long-term experience with. Stating that, the law of large numbers cannot be applied since chances are equally high for rates to explode or crash.

tl;dr Diversifying does not really work on *coins by now

aoeu

Posted 2014-11-04T11:25:11.850

Reputation: 101

There are services emerging to combat the volatility of Bitcoin. Bitreserve is one. But to be honest if you are worried about the volatility, just keep your funds in your native currency and buy bitcoin when you need bitcoin since there are plenty of places you can buy bitcoin almost instantly.

George

Posted 2014-11-04T11:25:11.850

Reputation: 586