1% Rule

The 1% Rule in cryptocurrency refers to a guideline suggesting that individuals should not invest more than 1% of their total portfolio into a single cryptocurrency. This rule is often followed to minimize risk and protect against potential losses in case a particular cryptocurrency underperforms or experiences a significant drop in value.

By diversifying their investments across a variety of cryptocurrencies, investors can spread out their risk and reduce the impact of any losses that may occur in a single asset. This approach helps to balance the potential for both gains and losses, as the performance of different cryptocurrencies can vary widely over time.

Ultimately, the 1% Rule aims to promote responsible investing practices and encourage individuals to adopt a cautious approach when entering the cryptocurrency market. Following this guideline can help investors safeguard their assets and make more informed decisions about their overall investment strategy.