“Bitcoin is king", but crypto portfolio diversification is essential

As the first cryptocurrency ever created, Bitcoin has long been regarded as the most important digital asset on the market, and a cornerstone of any crypto portfolio. Its unparalleled market dominance, leading market cap and status as “digital gold” have cemented its role as the go-to asset for both institutional and retail investors. But while Bitcoin’s sovereignty remains unchallenged, history has taught investors that putting all their eggs in one basket is far from a winning strategy. Diversification is essential, as highlighted recently by Bitwise CIO Matt Hougan in a note he wrote to clients in May 2025. While “Bitcoin is king” for now, crypto portfolio diversification is essential in order to spread risk and build a resilient portfolio that allows us to advance toward long-term and sustainable wealth creation. 

In this article, we dig a little deeper into Hougan’s philosophy, why Bitcoin and the crypto market remain volatile, and how to diversify a beginner’s crypto portfolio with Limitlex. 

“Bitcoin is king”, but diversification is essential 

Bitwise CIO Matt Hougan recently published a note to clients titled “The Case for Diversified Crypto Exposure” in which he laid out his arguments for diversifying any crypto investment portfolio. His position is clear. While Bitcoin remains the flagship cryptocurrency among all other digital assets, history strongly favors a diversified approach to investment across any asset class. Hougan draws his argument back to the early 2000s, when many investors who focused solely on dominant companies such as Google missed out on exponential gains by not investing in other tech innovators such as Amazon, Netflix or Salesforce. 

According to Hougan, the same pattern is unfolding today in the crypto market, where new applications, such as middleware or real-world asset tokenization, are reshaping the digital economy. If investors believe that blockchain technology is the new frontier for future innovation, they should take a leaf from history’s book and diversify, as Hougan puts it, with “a basket of crypto assets: Bitcoin, Ethereum, Solana, Chainlink, and more.” Diversification is not just a defensive strategy, but rather a way to participate in the full spectrum of growth across the crypto ecosystem. His final word of advice: “Don't fret about picking winners; invest in the big picture.”

Why do Bitcoin and the crypto market remain volatile?

Bitcoin, along with most other assets in the crypto market (with stablecoins being the main exception) are inherently volatile due to an amalgamation of factors that intensify price fluctuations. Unlike traditional financial markets, the crypto space is still relatively young, with lower overall liquidity and a more fragmented investor base. This means that even small shifts in buying and selling activity can lead to price swings. The market is also still highly sensitive to regulatory changes, and even sentiment driven by social media and platforms such as X (formerly Twitter) and Reddit, which can trigger rapid changes in asset value. 

A recent example is the $TRUMP meme coin, which saw huge value fluctuations following promotional activities on social media platforms. Despite its maturity and high market cap compared to other assets, Bitcoin, which was created in 2009, is not immune to this volatility. Bitcoin’s price movements often influence broader market trends and can be an accurate indicator of investor confidence. It is precisely this volatility that reinforces the need for crypto portfolio diversification, helping investors manage risk while positioning themselves to capture growth across this evolving space. 

How to diversify a beginner’s crypto portfolio with Limitlex

As seen above, building a diversified crypto portfolio is essential, and strongly advised by the people with the most experience in crypto investment. Its long-term, sustainable growth and wealth generation are the goal, research and diversification is key. Rather than concentrating investment on a single asset like Bitcoin, diversification allows investors to spread exposure across different assets, each with its own use case. This method not only helps manage risk, it also allows investors to support different kinds of projects within the crypto space, such as DeFi and blockchain infrastructure, fostering broader participation in the growth of emerging technologies.

At Limitlex, we offer tools such as Basket Buy, which allows users to allocate funds across multiple cryptocurrencies in a single transaction. This is a great tool for beginners who are not sure where to place their capital as it offers broad exposure and diversification that investors can tweak as they become more familiar with the market. Other Limitlex features such as Sell All enables quick exits in just one click should investors wish to reduce exposure quickly, while real-time alerts through email or Telegram allow investors to respond to market shifts. We also incorporate strong security measures, including two-factor authentication (2FA) and offer users support with both strategic decision-making and technical queries to make the investment process as clear and accessible as possible. 

For more insights and reflections on crypto trends, trading, how to use Limitlex, or to open a trading account with us, visit www.limitlex.com.