Stay compliant with crypto taxes: 5 practical tips for reporting gains, losses, and income stress-free using Bybit and Crypto Tax Calculator.

Tax season for crypto holders can get a little confusing. As more investors dip their toes into crypto investing, it’s important to understand how your transactions are taxed, and to report them properly. 

In this guide, we dig into five practical crypto tax tips to help investors stay compliant and avoid any surprises at tax time. 

 to bring you these tips. As part of our collaboration, they’re offering 30% off for first-time subscribers, making it easy to work out your Bybit and other crypto taxes in just a few clicks.

Cryptocurrency is typically treated by tax authorities as property, not currency. This means that crypto transactions are taxable, and therefore have to be reported. How they’re taxed depends upon the jurisdiction in which you’re located, the type of activity and your intent. 

Whether your crypto transactions are taxed as CGT or ordinary income, all of your transactions are taxable — even if you don't make a profit, or the trade took place on-chain. 

 can be carried to future years to offset your capital gains, so it’s worth always reporting — even in years where your portfolio is in the red.

Here are five practical tax tips to help Bybit users (and any crypto investor) stay compliant and make tax season easier. 

1. Use a crypto tax calculator that integrates with Bybit

Tax reporting doesn’t have to hold you back. Our 

 means that you can connect your Bybit account in just a few clicks. The integration automatically pulls in your transactions, saving you hours of manual work so nothing is missed. 

Import crypto transactions from all of your wallets and exchanges

Even if you mostly trade on Bybit, you need to include all of your crypto transactions in your tax report. While importing every single transaction may seem like tedious work, it doesn’t have to be. With our 

 (NFTs) and engage in various advanced trading methods within 

 (DeFi), Crypto Tax Calculator also supports more complex crypto transactions, such as those involving 

Double-check your transactions to make sure they’re correct

Whether you’re a regular crypto investor or you only trade casually, it's easy to overlook details. Once all of your transactions have been imported, carefully review them for errors or missing data. Crypto Tax Calculator’s review tools make it simple to spot issues so you can file your report stress-free. 

Now that you’ve checked all of your transactions, it's time to review your losses to see where you can save. You can use strategies such as 

 — whereby you sell at a loss — to reduce the taxes you owe. 

Crypto Tax Calculator’s tax-loss harvesting tool helps you quickly identify assets that have decreased in value since you first acquired them. You can sell these assets before the end of the financial year to reduce any capital gains you may have made. 

: Keep in mind that many tax authorities consider 

 a form of tax avoidance. This typically happens when an investor sells an asset at a loss, and immediately buys it back to create an artificial capital loss to report on their taxes. 

Generate tax reports and prepare to file 

Here comes the fun part (it’s true): generating your tax reports and filing. Crypto tax rules can vary depending upon where you live, so you’ll need to make sure you’re generating tax reports that are specific to your region. Crypto Tax Calculator currently supports over 20 countries, including Germany, the Netherlands, Belgium, Switzerland and Japan. 

Whether you’re submitting online or filing with an accountant, you’ll have everything you need to submit with confidence.

Being prepared and proactive is the best way to stay ahead for the tax season. While crypto tax regulations are continuing to evolve, most jurisdictions still require you to report any gains, losses and income. 

To help keep your reporting stress-free, you can use Crypto Tax Calculator for your crypto transactions and earnings on Bybit. Just connect your Bybit account, import all of your transactions and let the platform automatically figure out your gains, losses and income. Your tax-compliant reports will be ready for you in minutes, not hours. 

If you want to make tax season less difficult, take advantage of the 30% discount on 

 for first-time subscribers. Save time, reduce errors — and file with confidence this financial year. 

Beginner

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Five crypto tax tips for stress-free reporting

Diversification reduce reliance on any single market, ensuring stability during downturns. Here are the top 5 ways to diversify your portfolio.

Imagine watching the market crash while your portfolio stays steady — not because you predicted the dip, but because you built a strong defense against it. 

 is a time-tested financial safeguard in unpredictable markets. By balancing various assets, such as crypto, commodities, 

 and international stocks, investors can weather 

 and seize opportunities. So, how do you diversify effectively without overcomplicating things? This article explores the top expert strategies, and some common pitfalls to avoid.

 strategy that spreads investments across different asset classes, sectors or countries to reduce exposure to any single asset or risk. This approach aims to stabilize returns by cushioning the impact of market volatility on your overall portfolio.

Why is portfolio diversification important?

The age-old advice not to “put all your eggs in one basket” holds true when it comes to investing, and it’s a simple but powerful way to protect your wealth. Diversification helps safeguard your capital by spreading your investments across different assets so that when one underperforms, others may help offset the loss. This strategy is especially important for people nearing retirement, or for anyone who values financial stability.

By investing across various asset classes — such as stocks, bonds and real estate, as well as different industries and geographic regions — you build a portfolio that’s more resilient to economic ups and downs. But beyond just reducing risk, diversification often leads to better risk-adjusted returns and less day-to-day volatility, for an investment experience that’s less stressful overall. Moreover, because not all investments will dip at the same time, investors don’t continually have to monitor everything in their portfolios.

Diversification can also help guard against inflation, thanks to assets that tend to perform well when prices rise. At the same time, it opens the door to opportunities in growing markets, all while keeping your investment approach balanced and aligned with your long-term financial goals.

Top 5 tips for diversifying your portfolio

Here are five smart ways to diversify your investments and protect your future returns.

Tip 1: Spread investments across asset classes

Spreading your investments across different asset classes, such as stocks, bonds, real estate, cryptocurrencies and commodities, helps ensure your portfolio isn’t overly exposed to the risks of any single market segment. This makes your investments more resilient. Different assets often react differently to market conditions, so when one asset underperforms, others may perform better, balancing your overall returns (as well as your risks).

Assuming you invest solely in stocks, and the stock market declines, your entire portfolio may suffer. However, if you also hold bonds, which often perform well when stocks decline, any blow to your portfolio can be softened.​

Don’t just buy one type of stock or bond. Within each asset class, invest in a mix of sectors (such as technology, healthcare and energy), company sizes (large-cap, mid-cap and small-cap) and styles (growth, value and dividend). This approach further reduces the risk that poor performance in one area or industry will drag down your entire portfolio.

If you invest heavily in the technology sector and it experiences a downturn, your portfolio could suffer accordingly. Diversifying into other sectors like healthcare or consumer goods can help balance your investments’ performance.​

Tip 3: Low-cost index funds and ETFs for instant diversification

 (ETFs) offer a ready-made way to achieve diversification. They provide exposure to a broad range of assets or sectors, often at a lower cost than actively managed funds. This approach simplifies diversification, and can be more accessible for individual investors, especially beginners. It's an efficient way to diversify quickly and easily, as each fund typically holds dozens or even hundreds of underlying securities.

For instance, investing in an S&P 500 index fund gives you exposure to 500 large US companies, providing instant diversification across various industries.​

​Expanding your portfolio to include international assets can enhance diversification and provide exposure to growth opportunities beyond your home country. Investing globally can help mitigate risks associated with domestic economic downturns, as different regions may experience varying economic cycles.​

 their US counterparts in the first quarter of 2025. This outperformance was attributed to strong corporate earnings, increased defense and infrastructure spending in Europe, and the absence of direct US tariffs targeting European goods. Despite initial skepticism, European stocks rose by 10–12%, even as US markets declined somewhat, thus helping to stabilize global portfolio returns for investors with international diversification

However, investors must be mindful of currency exchange risks. Fluctuations in exchange rates can impact the value of international investments. For instance, if you invest in a European company and the euro depreciates against the US dollar, the value of your investment in dollar terms may decrease even if the company's performance remains strong.

Diversification isn’t a one-time task. Over time, some investments may grow faster than others, skewing your original allocation. Regularly reviewing and rebalancing your portfolio ensures it stays aligned with your 

 and investment goals, maintaining the benefits of diversification while improving long-term performance.

Let’s say your target allocation is 60% stocks and 40% bonds, but stocks perform well and grow to 70% of your portfolio. In this case, rebalancing would involve selling some stocks and buying bonds to return to your original allocation.​

Common portfolio diversification mistakes to avoid

Avoiding these common diversification mistakes can help you build a stronger, more resilient portfolio:

How to diversify your portfolio with Bybit

Bybit is a leading crypto exchange that offers a wide range of products designed to help you diversify across cryptocurrencies, traditional assets and innovative financial instruments. Following are some of the many products and services that Bybit offers.

Portfolio diversification is a key strategy for reducing risk by spreading investments across different asset classes, sectors and regions. Achieving this goal, however, requires a balanced and disciplined approach to ensure resilience and long-term growth. Bybit helps simplify this process with powerful tools like MT5 trading, Copy Trading and Structured Products. These tools allow investors to diversify their portfolios more effectively, providing access to diverse markets and strategies while also minimizing risk. 

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Top 5 tips to diversify your portfolio

Can Bitcoin replace gold as the go-to safe-haven asset? Explore how 2025's market turmoil reshaped investor sentiment toward BTC vs. gold.

The early months of 2025 have proven tough indeed for the stock market. After the newly elected POTUS Donald Trump was sworn in in late January, he quickly raised the issue of tariffs on imports to the US, a key pledge from his election campaign. The market reacted nervously, with the S&P 500 and Nasdaq-100 dropping 10% and 14% (respectively) between February 20 and March 12, some of the steepest declines for equities in many years.

 (BTC) joined the stock market during the February-March slump, shedding about 18% of its value. Needless to say, the ultimate safe-haven asset, 

, gained handsomely during the slump, as often happens during periods of uncertainty and stock market corrections or crashes.

However, another major stressor awaited the markets in April 2025. Trump's “Liberation Day” executive order imposing across-the-board import tariffs on most countries ignited another sell-off in equities. Barely coming to their senses after the February-March knockdown, US stocks absorbed another major hit. Yet, on this occasion, Bitcoin reacted altogether differently — the world's leading cryptocurrency rallied strongly after April 7, posting a completely divergent performance from that of the stock market.

Bitcoin's April rally, which is continuing into early May, has led many analysts and investors to ask a novel question: Has BTC become a new kind of safe-haven asset that can protect your investment during stock market declines? And if so, can Bitcoin actually overtake gold as the safe-haven asset of choice? In this article, we’ll examine the 

 comparison through the lens of an investor looking for the optimal safe-haven asset, for now and for future 

 in equities, which some analysts believe will be in abundance under the current White House administration.

Bitcoin's journey to recognition as a legitimate investment asset hasn't been easy. For years after its 2009 launch, it was largely viewed as a technology shtick with no real-world value. However, the seminal digital asset started to gain recognition in the investment mainstream amidst news of its undeniably gigantic returns.

The first notable Bitcoin bull run was the 2017 mega-rally. Having begun the year valued at around $1,000, BTC was worth $14,093 on the last day of December, a return on investment of more than 13,000%. Investors 

In early 2018, Bitcoin began to lose ground, steadily shaking off its remarkable 2017 gains. Until late 2020, Bitcoin couldn’t return to these late-2017 levels, a three-year fall from grace. Consequently, investors and traders viewed it largely as 

 and speculative, with little chance of regulatory acceptance into the mainstream finance world.

However, Bitcoin’s ability to thrive during periods of wider economic turbulence clearly manifested itself for the first time amidst the 2018–19 US-China trade war. Between mid-2018 and mid-2019, the US and China imposed tariffs on each other’s imports, igniting the first modern trade war between the two nations. While most markets experienced turbulence or declines, Bitcoin rallied strongly between April and June 2019, right at a time when the impact of tariffs was being felt throughout the economy.

Interest in Bitcoin as a legitimate investment asset skyrocketed between late 2021 and early 2024, thanks to enthusiastic institutional investor acceptance. In October 2021, the Securities and Exchange Commission (SEC) approved the first 

 (ETF). Then, in January 2024, the SEC provided a bulk 

As a result of these approvals, institutional investors rushed to Bitcoin, propping up its price and establishing it as a mainstream investment product.

Until April 2025, Bitcoin's reputation remained that of an extremely volatile, high-risk and high-reward asset. In recent times, it also fell largely in line with the stock market's direction as a classic, high-growth asset. But when the second Trump administration announced wide-ranging tariffs on Apr 2, 2025, named “Liberation Day,” BTC’s performance diverged notably from that of the stock market.

Major stock indices, such as the S&P 500 and Nasdaq-100, declined sharply in early April, and then began a slow and uncertain recovery from those losses. In contrast, Bitcoin, after a quick dip from April 2–7, rallied strongly afterward. As of May 7, 2025, it’s up approximately 29% from a month ago.

Bitcoin's strong performance beginning in April 2025 — at a time when the stock market dealt with losses, uncertainty and dismally low investor confidence — prompted comparisons with the classic safe-haven asset, gold. The question now is: Has Bitcoin evolved into a safe-haven asset, perhaps a more volatile counterpart to gold?

For thousands of years, gold has been valued by humans as a reliable store of value, as well as a currency. Its reputation as a safe-haven asset during times of economic uncertainty and declines is well-known. One of the most actively traded assets in the financial world, the yellow metal tends to attract investors trying to protect their wealth when the stock market is sliding.

While gold has been an ultimate store-of-value asset traded worldwide for millennia, the first modern mechanism for setting its market price was first established in 1919 in London. In September 1919, five major gold bullion traders — N.M. Rothschild & Sons, Mocatta & Goldsmid, Pixley & Abell, Samuel Montagu & Co. and Sharps & Wilkins — agreed (via regular meetings or telephone calls) to set a unified market price for gold.

Gold's popularity and its standing in the global financial system were dealt a massive blow in 1933, when US President Franklin Roosevelt signed an executive order that required Americans to turn over their gold holdings to the government for a fixed price of $20.67 per troy ounce. Aside from small quantities, private ownership of gold was now forbidden. Such draconian restrictions on gold lasted until 1974, when US President Gerald Ford repealed the order; but the effective ban on private ownership of gold in the US between 1933 and 1974 severely limited trading activity for the metal commodity.

Following the repeal of Roosevelt's gold-banning executive order, gold 

 commenced on Dec 31, 1974, on the COMEX futures exchange in New York. This signified the start of the modern era for gold trading on regulated financial markets. Once again, gold became one of the world’s key asset classes. Since then, gold has typically, though not always, had negative correlations with the stock market, and has acted as a safe-haven asset during equity bear markets.

Investing in Bitcoin vs. investing in gold

In recent years, both gold and Bitcoin have done well. It should be noted that investors have rarely viewed gold as a growth asset. Instead, its role has been that of a value protector during market declines. The table below shows the return rates for gold, Bitcoin and the stock market’s primary index, the S&P 500, for short-term periods (the past month and six months), as well as longer-term periods (the past year and five years). These figures are valid as of May 7, 2025, and are based on data from TradingView.

The data in the table clearly demonstrates that Bitcoin has performed better than gold (or stocks, for that matter). At the same time, gold has also done its job of protecting investment value, significantly outperforming the stock market over the past month, six months and 12 months — periods strongly affected by the recent and ongoing tariff wars ignited by the Trump administration. For instance, an average stock market investor has actually incurred small losses (of –0.7%) within the past six months, while gold investments have grown by a respectable 18% during the same period — an outstanding result in the current gloomy economic climate.

Over the long-term period of five years, gold and the S&P 500 have seen growth rates of similar magnitude (90.5% and 98.2%, respectively) during times of both market optimism/growth and stock declines (e.g., the first half of 2022, during which the S&P 500 dove 23%).

While gold has simply done its job as a hedge against stock market troubles, Bitcoin has done exactly that and more — its performance over these four analysis windows indicates that the world’s top cryptocurrency has acted as a safe-haven asset on steroids, delivering both protection against bear markets in equities and significant returns.

While Bitcoin has resoundingly beaten gold in terms of historical performance in recent years, it should also be noted that it remains more volatile than gold — with one crucial caveat: Bitcoin’s volatility over the past year (as measured by the coefficient of variation) is around 20%, while the same coefficient for gold (over the same yearly period) is 10%. 

Although Bitcoin is twice as volatile as gold, based on these estimates, these figures don't exactly paint a picture of an asset that’s wildly more volatile than gold, as many investors believe. Moreover, in the first four months since the start of 2025, the two assets have had an even smaller difference in terms of volatility — 8.3% for Bitcoin and 6.8% for gold, based on their daily prices.

Clearly, the new market realities are challenging old beliefs. Although Bitcoin remains more volatile than gold, the difference in volatility levels between the two assets may no longer be as large as it was in the past — at least during periods of significant price moves for gold, as in recent months.

Gold has traditionally been viewed as an excellent hedge against inflation, as well as even more extreme events, such as currency devaluation. It typically retains its value or grows in times during which fiat currencies may lose their real purchasing power due to inflationary pressures.

Bitcoin, on the other hand, hasn't traditionally been considered an inflation hedge. For all of 2022 and much of 2023, high inflation prevailed in the US. During these two years, Bitcoin behaved completely differently: it kept falling throughout 2022, but rallied strongly for most of 2023. This indicates that it may not yet exhibit one of the key properties of a safe-haven asset — the ability to hedge against inflationary value losses.

Both gold and Bitcoin feature liquid and vibrant markets. However, gold's liquidity is far higher than that of Bitcoin. Daily trading volumes for gold are typically between $200 and $300 billion, while Bitcoin's are about one-tenth of these figures. Gold's market cap stands at over $22 trillion, whereas Bitcoin's capitalization is $1.9 trillion, around 11.5 times lower.

Gold is easily accessible for institutional and retail investors via brokerages that offer gold-linked ETFs and gold-based futures contracts. You can also purchase physical gold in the form of gold coins and bullion.

Bitcoin is also a relatively easily accessible asset, as long as you’re crypto-savvy. It can be traded on 

 (DEXs) and directly through the Bitcoin blockchain via the 

 route. However, investors unfamiliar with blockchain technology (or those who prefer to stick to regulated exchanges) may find Bitcoin less accessible than gold.

, which are linked directly to blockchain addresses or to accounts at crypto exchanges. While holding funds in such a wallet is generally safe if you follow all the due diligence procedures, 

 do take place in the blockchain world. During such hacks, your BTC funds held in a crypto wallet might be compromised or even lost.

There are certain storage and security concerns for gold as well — at least if you invest in physical gold, rather than gold ETFs or futures. Bullion and other types of physical gold need to be securely stored. There are many gold storage providers on the market. These companies can keep your physical gold safe. However, there are fees involved for having your gold protected at these providers' secure premises. Additionally, these companies may be vulnerable to criminal activity and theft of the stored gold, although reputable providers have proven and reliable security standards.

Both gold and Bitcoin involve regulatory and market risks. Although gold is widely accepted in regulated markets, there might be issues with 

 arising from trading gold, particularly in the case of cross-border transactions. It should also be noted that gold is a non-sovereign asset — that is, it’s not issued or supported by governments or central banks, although they may use it as a reserve asset. Thus, gold's value is guaranteed only by market demand.

Bitcoin is much less regulated than gold. Although the US is moving toward comprehensive regulation for cryptocurrencies, a unified framework in this area still doesn’t exist (as of early May 2025). At the same time, a number of SEC-approved Bitcoin Spot and Futures ETFs provide access to the asset via the regulated environment of stock exchanges.

Similar to gold, Bitcoin is a non-sovereign asset, sometimes even referred to as digital gold. Its decentralized nature ensures independence from any government. Like gold, Bitcoin's value is derived solely from market demand.

Gold is among the most stable and secure assets in financial markets. The precious metal tends to retain its value and rise during periods when those of growth-oriented assets decline. However, prolonged bull markets can dampen the long-term performance of gold, at least relative to other investment opportunities. Over a sufficiently long period (e.g., five years or more), we may expect the stock market to go through periods of both growth and decline. While bear markets in equities are likely to boost gold, bull runs may lead to it losing ground.

In an earlier section of this article, we noted that gold and the S&P 500 performed quite similarly over the past five years. This time interval in the US economy involved several adverse events — the stock market decline of H1 2022, high inflation in 2022 and 2023 and, most recently, market slumps in February and April 2025 caused by Trump's notorious tariffs. Thus, gold has done its job of protecting investor value over the long term during these five years. 

At the same time, although these years involved several uncomfortable periods for stocks, gold hasn't been able to outperform the S&P 500 at all, posting an 80% five-year growth rate vs. 99% for the stock market index.

This is the whole idea behind investing in gold — it’s rarely a growth-oriented exercise, and is almost always an endeavor to protect yourself against losses.

In contrast, Bitcoin remains a growth asset, albeit one that has recently demonstrated potential to act as a safe-haven asset in times of stock market adversities. Its long-term value is also closely linked to its issuance and supply-limitation mechanisms. New Bitcoin is mined every ten minutes on the BTC network, with the release schedule subject to quadrennial 

Additionally, Bitcoin’s maximum supply is 

. Per the Bitcoin blockchain’s rules, there will never be more than 21 million BTC in existence. However, Bitcoin will only reach this limit around 2140. Bitcoin's limited supply, regular halvings and supply capping make it a scarce asset. Even though Bitcoin may not repeat its massive gains of yesteryear, the crypto's deflationary properties will continue to support its price in the future.

From a safety perspective, gold remains the preferred choice. In times of bear markets and economic uncertainty, gold does its job of protecting your funds from losses. Compared to Bitcoin, it's less volatile, more liquid and better regulated.

However, your safe-haven portfolio doesn’t have to be based on a single asset. Diversifying your investment for bear markets should ideally involve both an established and an emerging safe-haven asset. Bitcoin’s latest run in April 2025 demonstrated that it can work to counter potential slumps in equities. Additionally, Bitcoin has delivered better returns than gold over both short-term and long-term periods.

As such, a prudent strategy would involve allocating some of your funds to gold as a safe, regulated, low-volatility and highly liquid asset, while investing the remainder in Bitcoin as an emerging safe-haven asset that’s high-growth and volatile, but still sufficiently divergent from stocks.

Bybit offers you three ways to invest in gold — via 

 and crypto Perpetual contracts based on gold-backed cryptocurrencies (e.g., 

). For Bitcoin investing, the exchange offers you several options, including

While Bitcoin, the king of digital currencies, may not replace gold any time soon as the safe-haven asset of choice, it may be a viable addition to a portfolio designed to withstand stock market troubles. Bitcoin's high-growth nature, coupled with its emerging ability to thrive at times of capital flight from stocks, positions it as a new type of safe-haven asset — one that may not rival gold's stability and security, but can nevertheless act as a great diversifier for and counterbalance to the world’s most famous precious metal. Thanks to Bitcoin, safe-haven portfolios can focus both on value protection and growth, not merely on the former.

Intermediate

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Can Bitcoin overtake gold as the ultimate safe-haven asset?

Crypto portfolio diversification is the practice of spreading investments across different asset classes, industries or geographies in order to reduce risk.

In the whirlwind cryptocurrency space, the secret to keeping your profits lies not in predicting the next moonshot, but in mastering portfolio diversification: the art of turning market chaos into a calculated advantage. From blending rock-solid 

, this article reveals how strategically spreading your investments can shield your portfolio from meltdowns and position you to profit — no matter which way the crypto winds blow.

Portfolio diversification is the practice of spreading investments across different asset classes, industries or geographies in order to reduce risk.

This strategy aims to mitigate the impact of poor performance in one area by balancing it with gains or stability in others.

Portfolio diversification entails spreading investments across different asset classes in order to minimize risk. By holding a mix of stocks, bonds, real estate and commodities, you avoid putting all your eggs in one basket. When one asset class takes a hit, others may remain stable or even perform better, helping to reduce the overall risk to your portfolio.

In the crypto market, diversification works in a similar way, but with an extra layer of complexity. Cryptocurrencies 

, so diversifying within this market is essential. A well-diversified crypto portfolio often starts with well-established coins like Bitcoin (BTC) and Ethereum (ETH). These major assets are the foundation of many portfolios, due to their market dominance and liquidity. Then, in order to add growth potential (though with higher risk), investors might include mid-to-small cap coins like 

You can also diversify by sector, investing in different use cases, such as 

, AI or non-fungible tokens (NFTs). This can involve a mix of altcoins and newer tokens that are part of various blockchain ecosystems — such as 

 (DOT) — to reduce dependency on a single blockchain's performance.

For those looking to minimize volatility, diversifying into stablecoins like 

 can be a good option. These assets are pegged to traditional currencies such as the US dollar, making them more stable while still allowing you to gain exposure to the crypto market.

 (ETFs) or index funds can help simplify crypto diversification. These options give investors access to a basket of cryptocurrencies, reducing the need to manage each asset individually and providing a more hands-off approach to diversification.

Diversifying your cryptocurrency portfolio is a strategic approach to managing risk and enhancing potential returns in the volatile crypto market. By spreading investments across various digital assets, sectors and regions, investors can mitigate the impact of adverse movements in any single asset as follows.

Different types of portfolio diversification

Diversifying your crypto portfolio is essential for managing risk and capturing growth across varying market conditions. Below are some key methods to consider.

Infrastructure tokens like Ethereum (ETH) and Cardano (ADA) are vital for running blockchain networks, while 

) give holders a voice in project decisions. Meanwhile, 

), though speculative, can offer short-term gains, due to community hype and viral momentum.

Diversification is a powerful strategy to manage risk and optimize returns, but it requires careful planning and ongoing monitoring. Following are some key considerations before diversifying your crypto portfolio.

Assess your risk tolerance and investment goals

 and investment objectives. If stability is your priority, consider focusing on well-established assets like BTC, ETH and stablecoins like USDC and USDT. These assets tend to offer lower volatility and more predictable returns. However, if you're comfortable with higher risk for potentially higher rewards, you might allocate a portion of your portfolio to emerging sectors, such as DeFi tokens or gaming coins. Additionally, your time horizon matters — since short-term investors may prefer liquid, low-volatility assets (such as stablecoins), while long-term holders may opt for high-potential assets, such as NFTs or blockchain infrastructure (e.g., mining operations or tokenized real estate).

When diversifying, balance large-cap cryptocurrencies (e.g., BTC or ETH) with smaller, high-growth altcoins. Large-cap assets are generally more stable, and provide a solid foundation for your portfolio. Meanwhile, smaller-cap coins can offer higher growth potential, but they come with more risk. 

Spread your investments across different sectors, such as DeFi, 

 platforms, in order to reduce overexposure to any one area. Consider geopolitical factors and the regulatory environment, as these factors can affect markets differently in various regions, making geographical diversification important.

A balanced portfolio is key to effective diversification. For example, you could allocate 40% to Bitcoin and Ethereum, 30% to stablecoins for liquidity and risk mitigation and the remaining 30% to altcoins or alternative investments, such as blockchain startups. Another strategy is that of 

 (DCA), whereby you invest a fixed amount periodically, regardless of market fluctuations. This helps to reduce the impact of market timing and smooth out crypto market volatility.

While diversification has its advantages, over-diversifying can dilute your returns because your gains may be spread thin across many assets. Frequent trading and rebalancing can also lead to higher transaction fees that can into your profits. Additionally, managing a diverse portfolio requires time, expertise and constant attention, which might not be feasible for every investor.

To further reduce exposure to crypto volatility, think about including traditional assets, such as stocks, ETFs or blockchain infrastructure investments. These can act as a stabilizing force during crypto market downturns, offering balance to your portfolio.

Ultimately, a well-diversified portfolio can help investors navigate market volatility with more confidence. Diversifying your portfolio is a vital strategy for managing risk and optimizing returns, particularly in the volatile crypto market. By spreading investments across various asset types, market caps, sectors and investment vehicles, investors can cushion the impact of market fluctuations and potentially capture better returns. While diversification offers many benefits, it requires careful planning, constant monitoring and a balanced approach in order to avoid over-diversification and excessive trading costs.

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Portfolio diversification: The key to efficiently navigating market volatility

Discover BlackRock’s BUIDL, a tokenized money market fund issuing a yield-bearing stablecoin backed by U.S. Treasuries and offering daily dividend payouts.

 (RWAs) are one of the fastest-growing niches in the crypto world. RWAs allow institutional entities to bring various 

 (TradFi) assets to an on-chain environment. These may include commodities, equities, bonds, cash equivalents and more. According to DefiLlama, the 

 as of early April 2025, and a clear leader of this niche has emerged by now in the form of BlackRock’s tokenized money market fund, BUIDL.

Launched in March 2024 by the world’s top asset manager, BUIDL has already amassed a TVL 

 as of the time of this writing (Apr 15, 2025). In this article, we’ll take a closer look at this category leader launched by BlackRock via Securitize, a major provider of RWA tokenization services.

 (BUIDL) is a tokenized money market fund launched in March 2024 by BlackRock, Inc., the world’s largest investment management firm by assets under management (AUM).

 The New York–based behemoth of the investment finance world launched the fund via Securitize, one of the leading providers of asset tokenization.

BUIDL invests in short-term cash and cash equivalent assets, such as Treasury bills, certificates of deposit and commercial paper. It may suit investors who’d like to use their spare cash for low-risk and quick — even if modest — returns.

BUIDL was initially launched on the Ethereum blockchain. By the end of 2024, it had expanded to several more chains, including 

 (POL). A year after its launch, in March 2025, the fund also added 

As of Apr 15, 2025, BUIDL has accumulated a TVL of around $2.37 billion, making it the largest asset in the RWA category as defined by the DefiLlama portal. This figure represents nearly 20% of the category’s total TVL of $11 billion.

BUIDL was tokenized and launched as a USD-pegged 

. Investment in the fund delivers daily accrued dividends. As such, BUIDL operates as a yield-bearing stablecoin. Besides providing rate stability, these stablecoins regularly accumulate rewards for investors. The rewards, however, aren't added to each unit of BUIDL held, as the stablecoin itself has a fixed rate of $1 at all times. The accrued dividends are paid out separately in BUIDL tokens to investors every month.

Unlike many other stablecoins, BUIDL isn't traded on the crypto market. In essence, it acts as a certificate of your investment in the fund.

Investing in BUIDL is possible exclusively via Securitize. The minimum investment amount is $5 million, and the fund is open to Qualified Purchasers. Under US securities law, Qualified Purchasers are entities, such as individuals and family offices, who have at least $5 million in investments.

BUIDL boasts a number of significant benefits, including the following:

Despite its numerous merits, investment in the BUIDL fund carries certain risks:

For high–net worth individuals and institutional investors, BUIDL represents a great alternative to traditional money market funds. Its blockchain-native nature will certainly appeal to any investor who'd like to keep their assets on-chain while enjoying the security and regular yields provided by the investment titan BlackRock.

As the niche of tokenized treasuries gains momentum, we may see similar products launched by major TradFi players. For now, BUIDL represents one of the rare options for tokenized money market fund investors, and its niche-leading TVL confirms that the market has enthusiastically embraced this novel product.

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BlackRock’s BUIDL: A guide to tokenized yield-bearing funds

Discover the 11 best gold-backed cryptos of 2025, offering real asset security amid market volatility. Explore top tokens like XAUt, PAXG & more.

The early months of 2025 have ushered in a flurry of changes in financial markets, primarily caused by the new US presidential administration of Donald Trump. Drastic cuts to US public spending, the threat of tariff wars and a new paradigm in the relationship between the US and its trading partners have unnerved markets and caused 

 prices and investor sentiment to take a hit. As stocks have dived, the crypto market has also slowed, reflecting the overall negative outlook prevalent among investors across different markets.

The world's primary precious metal commodity, 

, is surging in an atmosphere of largely declining investor sentiment. This is hardly surprising to anyone familiar with the history of financial markets. The yellow metal has always done well when stocks are getting hammered and the outlook for growth-dependent assets is souring. As of the time of this writing on Mar 24, 2025, gold’s price has appreciated by around 5% over the past 10 days. This change might seem insignificant to crypto investors, who are used to much more volatile swings in the price of their assets. Still, it represents a notable weekly jump for gold, an asset known for its price stability and low volatility. 

As gold rallies, many in the crypto investment world are turning their attention to a previously unassuming category of the market — gold-backed cryptocurrencies. While the broader crypto market is rather lethargic, cryptocurrencies in this category are posting weekly growth rates that virtually mirror the growth in the price of gold. If you’re a crypto investor looking for a safe harbor in these times of uncertainty, gold-backed tokens might just be the answer. In this article, we’ll cover the top 11 gold-backed cryptos as of Mar 24, 2025, which together make up nearly the entirety of this small category's total 

A gold-backed cryptocurrency is a tokenized digital asset whose value is typically supported by reserves held in gold. In some cases, the token issuer holds the gold reserves used to back the cryptocurrency. In other cases, a third-party trusted custodian maintains the reserves of the underlying physical gold on behalf of the issuer.

The earliest notable gold-backed cryptocurrencies were launched around 2019–2020. Among these are Tether Gold (XAUt), introduced in 2020, and Pax Gold (PAXG), which debuted in 2019. Another notable player in this area, Perth Mint Gold Token (PMGT), operated between 2019 and 2023.

Gold-backed cryptos let you turn gold ownership into a more flexible and liquid form for 

Besides buying gold crypto assets as a hedge against the volatile crypto market, you can also trade gold and other asset classes — such as crypto, forex and market indices — via 

. This product lets you access multi-asset trading opportunities alongside benefits like high leverages of up to 500x, tight spreads, competitive fees and 24/7 support.

How do gold-backed cryptocurrencies work?

As noted above, gold-backed cryptocurrencies are based on physical gold reserves. The exact mechanics of the reserve maintenance can vary. Some projects store the gold themselves, while others rely on external custodians to handle the storage.

These cryptocurrencies appeal to investors who want crypto exposure, but prefer a real-world asset's security. Gold serves as an excellent backing for a digital asset, as it’s a well-established and widely respected commodity. During 

, as stocks and cryptocurrencies plunge, gold tends to rise in value, potentially lifting gold-backed cryptos up with it.

Like any other asset on the market, gold-backed tokens have unique pros and cons. One con is that in a booming market, they tend to offer lower returns as compared to standard cryptocurrencies or other high-growth assets. Another drawback is the lack of unified regulatory mechanisms to ensure that the gold reserves actually exist, are maintained at the claimed levels and are held by a trustworthy party. Sufficient liquidity can also be an issue for smaller projects.

On the positive side, the biggest advantage of these assets is security during bear markets: as financial markets turn south, gold-backed cryptos are more likely to hold their value than other cryptocurrencies. Another key pro is owning tokens propped up by a 

 — an excellent way to silence crypto skeptics who constantly claim that these assets have no intrinsic value behind them.

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