A crypto investment can be lucrative, but it can also become worthless if you don’t know how to manage your crypto portfolio well. Keep in mind that crypto assets are more volatile than other traditional assets. While it makes them perfect for earning big profits, you may risk losing everything if you don’t react wisely.
By having a well-managed crypto portfolio, you won’t only preserve what you have, but you’ll also have an opportunity to make extra profits.
Here are the tips to help you get started managing your crypto portfolio:
- Use Crypto Trackers
One of the benefits of the crypto market is the digital currency’s decentralized nature. As you create your portfolio, you may need to deal with various exchanges, platforms, and wallets, enabling you to take advantage of promotions. As a result, it’s cumbersome to manage your crypto portfolio across such wallets and try to remember where your crypto assets are.
By using a crypto tracker, you don’t have to worry about that. It’s a tool that reads the data of your wallets and displays the aggregate information into the dashboard for you. A crypto tracker also makes it easier to keep up with how much you’ve invested in every cryptocurrency. If one of your crypto assets outperforms another, you’ll gain a bigger percentage of your overall portfolio.
Many crypto trackers also allow users to trade across different crypto exchanges. Such trackers offer more convenience. You don’t need to log into every exchange account to make your trades but convenience often comes with a fee.
- Stay Updated
The crypto market changes constantly. It’s full of long-term trends as the market introduces innovations and other essential blockchain technology concepts. Non-fungible Tokens (NFTs) are the newest crypto trend.
To manage your crypto portfolio, try to understand various underlying trends that matter to you. In addition, never hesitate to check out emerging projects whenever you review your portfolio. This way, you won’t miss out on anything important to help you earn better profits over time.
- Have A Strategic Exit Strategy
Another way to manage your crypto portfolio is to include an exit strategy. Regardless of your expertise and experience in trading crypto, an exit strategy allows you to decide wisely if the market collapses. You’ll also know what price you’ll close out the trade to gain profits and avoid losses in the long run.
- Focus On Your Investment’s Security And Safety
No matter how reliable your crypto wallet is, there’s a bigger risk that your private key can be lost or stolen. A computer can be a disaster without having a backup plan. Therefore, the investment you store in your wallet can become vulnerable to potential hacking.
With this in mind, you should prioritize the safety and security of your crypto assets as you manage your portfolio. There are some ways to ensure safety and security, and these include the following:
- Use a two-factor authentication
- Keep your wallet updated
- Keep a small amount only
- Backup your seed phrase or private key
- Consider Crypto Rebalancing
When rebalancing your portfolio, having a well-diversified portfolio allows you to utilize the gains from your outperforming assets more freely. In your portfolio, for instance, you have three kinds of assets. You can decide to sell some of your coins to make room for new ones.
As the value of your coins increases, you can decide to sell your others to invest in some coins. You’ll be able to rebalance your crypto portfolio with the profits from your outperforming assets in this manner.
- Be Rational
Since the crypto market is highly volatile, expect wild swings. For this reason, make sure to control your emotions and be rational.
Fear of missing out (FOMO) is one of the reasons traders fail to manage their crypto portfolio. Usually, emotions may result in purchasing assets of high prices, only to see a big correction take hold.
If you want to be successful in managing your crypto portfolio, you have to be rational with your goals and plans. There will be good investment opportunities to grow your overall portfolio balance. The use of technical analysis eradicates emotions and helps you foster discipline trading strategies. The only thing you need is to stick to the plan.
- Diversify Your Investment
The other way to manage your crypto portfolio effectively is to diversify your investment. This crypto investing method allows you to invest your money in various digital currencies available in the market and not put all your investment in a single crypto asset.
Well-diversified portfolios that consist of traditional and crypto-assets are also the smartest and safest choices to make. Also, these can help protect your investment and have a secure backup in case a crisis occurs.
Conclusion
Keeping track of your crypto portfolio doesn’t have to be difficult. However, it’s crucial to plan which assets to consider and how much you wish to invest. Having a thorough understanding of your thought process can help you make more profits and avoid making rash decisions. So, follow the above tips wisely to ensure better crypto portfolio management.