Crypto investors beware of what does alt coins true gains really mean!

in #crypto7 years ago

Ysterday's Ethereum run and today's crypto market crash made me realize something very important about all ALT coins, they are all heavily influenced by the price of the major crypto currencies, Bitcoin (BTC) and Ethereum(ETH) .
This is because all Exchanges rely on one of these major crypto currencies to convert any other crypto.
What does this mean is that your ALT coin gains are heavily subject to their price relationship of the major cryptos (ETH and BTC). If you made 30% gains on XRP and ETH/XRP price drops by 30% you really didn't make any gain!
This also means that if the price of any of the major crypto's increases, the value of all other currencies will decrease and become cheaper. Again this is because all exchanges use these major cryptos as ways to convert and compare the value of everything else.

What can we do about this?

The best approach to minimize impact on your portfolio is to diversify and always hold 20-30% of the major cryptos. This way if one goes up/down the overall real value of your cryptos is protected.

What are your thoughts?