Everything I learned about crypto I learned from Don Quixote
“It is the part of a wise man to keep himself today for tomorrow, and not to venture all his eggs in one basket.”
It was from this line — Miguel de Cervantes’ Don Quixote (1605) — that we get the expression, “Don’t throw all your eggs into one basket.” It’s a metaphor about risk and the idea that, in planning for the future, people should spread out their investments (of both time and money) rather than focusing on a single shiny object.
In finance, we call this diversification, and the importance of a diversified asset portfolio holds true in both traditional finance and the world of crypto.
Stocks, Bonds, and… Crypto?
Whether you’re just dipping your toes into crypto, or… you’re knee deep, most of us still maintain some sort of connection to traditional finance. Whether you own stocks, bonds, mutual funds, or money market accounts, it makes sense to include cryptocurrencies in a well-balanced and properly-diversified investment portfolio.
But, even within crypto, it’s important to diversify by holding more than just one token. After all, the crypto space (and decentralized finance in particular) has a history of volatility — the very thing that diversification hedges against.
The purpose of diversification, however, isn’t just about protecting yourself from the volatility of individual tokens. Crypto also has a lot of innovative projects and development teams, so spreading out your holdings enables you to participate in as many of those projects as you want.
Our Mission is You.
Countless times on the Bridges Blog, we’ve made reference to our mission of making the future of finance work for everyone. Enabling more people to participate in DeFi is core to who we are — it’s part of our DNA.
That’s why we don’t just want you to hold Bridge$. And, yes, you read that correctly — although we can’t, and don’t, offer advice about specific crypto projects, we can (and do) encourage holders of Bridge$ to hold more than just Bridge$ :).
As a reminder, projects (both new and existing) listed on Bridges Exchange undergo a thorough vetting process that includes security and safety checks, a review of the development team, an audit of tax protocols and anti-whale practices, a requirement to bring some form of innovation, and many other things. And while we can’t speak to the likelihood of growth for each project (no more than we can 100% guarantee its safety), the inclusion of each project on the Exchange indicates that it met the listing requirements at the time of review.
And so, we come full circle
Diversification is a smart strategy whether you’re 25… 85… or whether you’re new to crypto or a seasoned player. As we work to bring more participants into the ecosystem, and help them to see the importance of DeFi in realizing their financial goals, we encourage everyone to diversify their holdings and, as Cervantes reminds us, not throw all of our eggs into one basket.
And with the new Bridges Exchange now listing more than 40 different tokens, you can do just that.