1% Rule

The 1% Rule in cryptocurrency refers to the practice of investing no more than 1% of your total portfolio into a single digital asset. This rule is commonly followed by investors to manage risk and avoid significant losses in case the value of a particular cryptocurrency declines sharply.

By diversifying investments across multiple assets and adhering to the 1% Rule, investors aim to protect their overall portfolio from the volatility inherent in the cryptocurrency market. This strategy also allows for potential gains from different assets that may perform well over time.

While the 1% Rule is not a guarantee of profits, it is a risk management technique that can help investors mitigate potential losses and maintain a balanced portfolio. By spreading investments across different cryptocurrencies, investors can reduce their exposure to the fluctuations of any single asset and increase their chances of long-term success in the crypto space.