29 November 2023
A cryptocurrency portfolio is a platform that lets you manage and keep a track of the cryptocurrency you hold in value at one single place. Basically, it shows the crypto coins that you hold, its amount, value, and you can even learn and keep a track of your crypto coins in real-time. It also helps to determine and understand whether the cryptocurrency that one wants to buy is promising and would add any value to the portfolio.
1. Managing Crypto-portfolio
Analysis of the Cryptocurrency
There are ‘n’ number of cryptocurrencies in the market and every cryptocurrency is comparatively distinct to the other. Hence, before you invest your money for adding into your crypto-portfolio, it is important to do thorough research and study on the cryptocurrency. Every cryptocurrency has a whitepaper on its official website, with the help of it, you can learn everything about the cryptocurrency that you need to know. It helps provide the previous actions and data of the company, the history of the company can also help you understand future behavior. Going thoroughly with the cryptocurrency’s website would provide you with the insight of the company. Diligence plays a vital and key role.
Making an analysis of the status of the project, the contributing work of the developers, learning about the company’s investors and community, trading volume, scalability, and so forth.
2. Allocation of the Portfolio
There are several strategies that you can follow to allocate your crypto-portfolio. The keys are maximalism towards the cryptocurrency you are interested in, if a person is a Bitcoin maximalist, he/she would allocate a maximum percentage of allocation to Bitcoin and the rest for the other cryptocurrencies but it is also important to be conservative.
Rebalancing your holding is also a way to allocate your cryptocurrencies, such as, choosing the number of cryptocurrencies you want and then setting a monthly allocation percentage.
- Diversifying of the Investment
This method plays a fundamental role, its basically not investing all your money in one single cryptocurrency but investing in other stable cryptocurrencies too. A diversified portfolio consisting of crypto and traditional assets is the safest and smartest choice to make and it will also help to protect during the turbulence in the market. So as when the crisis occurs you will always have a safe back-up.
- Start at the Right Time
When the crisis occurs, many people tend to sell their investments, and the prices for the most eventually drops. This is the time, when you can buy and invest in the cryptocurrency you always wanted, building a profitable portfolio.
- Safety is First
Making all the efforts to get the profit from the investment is not enough but one should also keep it safe or else all the hard work and strategies will be in vain. Many people rely on exchanges with the security of their cryptocurrencies as they trust the developers to take the safety measure. However, there are hackers who would hack your account in a sophisticated manner, thus, you can store it in the cold wallet which will help in keeping your crypto safe and your crypto-portfolio on a profitable note.
- Planning Entry and Exit Points
Risk management is an essential part while managing the crypto-portfolio meaning to understand and know when to get enter and exit. Many trading platforms have a risk management factor also called stop loss and take profit during such situations.
- Do not get Influenced
The crypto world will introduce you to the kind of chaos wherein a hundred people will influence or attract you with a million opportunities to earn. It is of uttermost importance for one to not get influenced and be smeared from the tactics offered.