The most common serious mistake in crypto depositing is not a bad trade. It is putting everything into one place and letting one thing happen to it.
What concentration really is
Concentration is not only "all in one coin". It is all of your money exposed to the same set of things going wrong at once:
- the same asset class (crypto, not savings, not property);
- the same market mood (a fall affects all of it);
- the same platform, in most plans' case — a programme is one operator.
Even the tier does not diversify. Starter, Gold and Liquid Gold all sit in the same asset, in the same market, with the same operator. Choosing a bigger tier is more of one thing, not a spread.
A way to think about size
Rather than a percentage, ask a question you can answer honestly: if this went to half its value next month, would I have to change another part of my life to cope?
If the answer is yes, the position is too large, whatever the article that recommended the amount said. If no, you are probably sized sensibly.
What actually spreads risk
- Different asset classes — property, cash, bonds, insurance. They do not move with crypto.
- Time — money you will not need for a long time can be exposed to more movement than money you will.
- A cash reserve that is never deposited. This is the one people skip and the one that most reduces forced decisions.
Related: managing risk, holding long term, and why the price moves like this.