Welcome to Cointelegraph Market’s Altcoin Roundup, an in-depth newsletter that focuses on investing from the perspective of fundamental analysis and seeks to identify emerging blockchain projects and tokens that fill niche demands within the growing cryptocurrency market.
The concept of multi-sector investing has long been advocated in traditional finance as the conventional approach to building a balanced portfolio. Typical allocations include representation of stocks, government and corporate bonds, commodities and real estate.
Now that the cryptocurrency market has grown to a multitrillion-dollar ecosystem with numerous emerging assets, clear sectors are beginning to emerge. Savvy crypto investors looking to apply portfolio diversification practices to their holdings should begin to pay attention.
The previous Altcoin Roundup discussed some of the top layer-one solutions and coins like Polkadot/DOT, Cosmos/ATOM and Solana/SOL that have been gaining prominence over the past year, but these projects could also fall under the large-cap investment umbrella alongside high-profile assets like Bitcoin (BTC), Ether (ETH) and Cardano’s ADA.
Once an investor has an adequate representation of blue-chip projects, other emerging sectors like decentralized finance (DeFi), oracles and stablecoins can be considered.
DeFi: Uniswap, Aave and PancakeSwap
Decentralized finance emerged during the summer of DeFi in 2020, and the sector helped kick off the current bull market by bringing a new level of excitement to the crypto ecosystem, which was in need of the next big innovation.
One of the best metrics used to demonstrate the rising success of DeFi as a whole is the total value locked (TVL) ranking, which collectively reached an all-time high at $157.63 billion on May 14, according to data from Defi Llama, and stands at $116.62 billion at the time of writing.