An in-depth guide for managing your crypto portfolio
The crypto community is one of the most competitive ones out there, but you get to interact with thousands of people who are always ready to help you out.
However, gaining expert onion or investment-related guidance cannot be termed plausible because one size doesn’t fit all. This is because what worked for others might not work for you.
For this reason, it’s imperative to devise your own investment strategy to maintain a well-balanced portfolio. So, if you have always struggled to manage the crypto portfolio, this is your ultimate guide!
Cryptocurrency portfolio – What is it?
In the simplest words, a cryptocurrency portfolio is defined as the tokens and coins that represent your investments. For instance, if you have purchased Bitcoin, DOGE coin, and Ethereum from The official BitIQ platform or other platforms, the portfolio includes all those assets. As far as the valuation of the portfolio is concerned, it depends on the current market price of every cryptocurrency that you hold.
In case you have just stepped foot in the crypto world, there are high chances that you only have one asset in the portfolio. However, as you start investing in more cryptocurrencies, the portfolio will become diversified.
Importance of a diverse crypto portfolio
It’s a common myth among beginners who have just started to make investments in cryptocurrency that holding some part of Bitcoin will turn them into millionaires – it goes without saying that investing in Bitcoin is a great start, but they need to understand that there is a whole more crypto world beyond Bitcoin. Sure, there was a time when every investor was bullish on Bitcoin.
In 2021, the price of Bitcoin increased like never before and gained the value of $65,000 in April 2021. However, the market crash that came after that was extremely nosedived as everyone started speculating about the energy consumption of Bitcoin. Having said that, people who had only invested in Bitcoin struggled while the investors with a variety of cryptocurrencies enjoyed a balanced time.
Having said that, diversity is the most critical factor in establishing a balanced cryptocurrency portfolio. This is because if you keep using one cryptocurrency, you will be prone to the excess ups and downs. Being a crypto investor, it is essential to have multiple cryptocurrencies, particularly if you don’t want to be significantly impacted by the market’s volatility.
Focus on the dynamics
It goes without saying that the future cannot be predicted, and things don’t turn out as you expect them to – at least not always. With a diverse portfolio, you will have a better opportunity to select an asset that you think will perform better than Bitcoin in the future. Keep in mind that there is no guarantee that it will spike higher than Bitcoin, but you will be prepared to take a leap with other tokens and coins.
For this reason, you must always research a variety of cryptocurrencies in the market and focus on the projects that can help fix real-world issues.
Rebalance the cryptocurrency portfolio
Having a diverse crypto portfolio means that you have the freedom to utilize the gains from the well-performing assets to rebalance the portfolio. For instance, if you have 50% of one coin and 25% of two coins. Once you decide to sell the portion of 25% coins, you will be able to purchase more of the 50% coin, which will enhance the portfolio’s capacity.
With the increased value of the coin, you will be able to rebalance the cryptocurrency portfolio with the help of profits gained from well-performing assets.
Ways to manage the cryptocurrency portfolio
DCA (dollar-cost averaging) is a well-known investment strategy with which you can divide the investment into a specific range of periodic investments to limit the outcomes of volatility on the complete investment portfolio. Keep in mind that DCA is the long-term investment method to achieve sustainable and positive growth over the course of time.
Crypto portfolio tracker
Sure, you have multiple assets in a variety of wallets, which means monitoring the assets and organizing them will be extremely challenging. For this reason, it’s critical to keep track of the crypto portfolio, and you can invest in a crypto portfolio tracker to monitor the value changes, promising proper and efficient management of the portfolio. These trackers can be integrated with the various exchange platforms and wallets, leading to quick trading.
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