Align your Portfolio – Evaluating Types of Cryptocurrencies

In the world of investments, diversification is key, and this is no different when it comes to the rapidly expanding universe of cryptocurrencies. Choosing the right types of cryptocurrencies can add to your portfolio's vibrancy, wealth potential, and resilience to volatility. But, for a newbie investor, the vast ocean of cryptocurrencies can be confusing, and it takes a good understanding to make the right decisions. So, let’s break it down, and understand how to align your portfolio by evaluating different types of cryptocurrencies in the market today.

1. Bitcoin (BTC)

Created in 2009, Bitcoin is the premier and most well-known cryptocurrency. It's the mainstay of any portfolio because of its longevity and widespread acceptance as a form of digital payment. However, it's also the most volatile, so be prepared for fluctuations.

2. Ethereum (ETH)

Ethereum is a whole platform that enables smart contracts and decentralized applications. Its intrinsic token, Ether, is used to facilitate these functions and potentially earn value. Owning Ethereum can be a good choice if you believe in the shift towards decentralization.

3. Ripple (XRP)

Ripple is unique in that it’s not just a currency, but a payment protocol. Its primary goal is to boost cross-border transactions. If you believe in the potential of global transactions and Ripple’s ability to streamline them, Ripple can be a good investment.

4. Litecoin (LTC)

Litecoin is often considered the silver to Bitcoin’s gold. It offers faster transaction confirmation times and a different hashing algorithm. Litecoin could be a viable option for diversification within a cryptocurrency portfolio.

5. Altcoins

Apart from the big names, hundreds of alternative cryptocurrencies, called “altcoins” are available. These, like Cardano, Polkadot, Chainlink, and others often provide innovative features and specific uses. Each altcoin presents its risks and potential rewards, so they require extra diligence.

Once you've identified potential cryptocurrencies to add to your portfolio, it’s crucial to do your due diligence. Research the use case, the founders, partners and backing institutions, market capitalisation, and trading volume. All these factors can help you assess their potential for growth and risk level.

No matter how appealing a cryptocurrency looks, remember not to put all your eggs in one basket. Cryptocurrencies are highly volatile, and betting on only one can bring both colossal returns and losses. Thus, diversify your portfolio with a mix of top and emerging cryptocurrencies.

Additionally, keep your portfolio balance in check. As some cryptocurrencies may grow faster than others, it's important to shift your investments around. Rebalancing your portfolio can help you maintain your desired level of exposure to each crypto asset.

In conclusion, successfully aligning your portfolio with a roster of well-evaluated cryptocurrencies can offer an innovative and potential boon to your investment strategy. Remember to research thoroughly, diversify your portfolio, and maintain proper balance for best results. Happy trading!