Crypto portfolio management is an important step that you cannot ignore when investing in Crypto. However, not everyone understands the importance of a portfolio. The following article will help traders learn some tools and ways to effectively manage their investment portfolio. Let’s explore with Crypto Trading!
Answer What is a Crypto portfolio?
The crypto portfolio is understood as a cryptocurrency investment portfolio. This is a collection of digital assets (coins, tokens, stablecoins) owned by individuals or financial institutions. And the process of traders learning and tracking the flow of cryptocurrencies, then buying and storing is called the process of adding assets to the portfolio.
Why is it necessary to manage a Crypto portfolio in Crypto trading activities?
Portfolio management aims to help traders achieve their financial goals. Common activities in the portfolio management process include Capital allocation, portfolio monitoring and evaluation, digital asset restructuring, etc.
Crypto portfolio management depends on many different factors. These include Fundamental analysis, financial data analysis, market trend updates, etc. From there, users can be aware of the risks in trading and build a reasonable strategy to optimize profits for themselves.
When investing in cryptocurrencies, you need to set up a paper wallet paper wallet. Using a paper wallet will help you protect your assets from hackers and malicious programs.
Some effective Crypto portfolio management tools
When managing your Crypto portfolio, you can refer to and use the following tools:
- CoinMarketCap: This tool helps traders easily update the price fluctuations in the current cryptocurrency market. You can add the tokens you are holding, and the price of the purchased tokens to track profits accurately.
- Blockfolio: This is an application that allows investors to track the prices and quantities of assets in their portfolio. Blockfolio will notify users of prices. At the same time, the application also updates detailed news about cryptocurrency projects.
- Delta: You can view your crypto portfolio, and traditional investments in the same app. Delta is connected to 20 different exchanges.
- CoinGecko: With CoinGecko, investors can create and track their digital assets. The tool also provides charts and detailed statistics on the performance of each asset.
- CoinStats: This platform helps traders track and manage assets. Similar to CoinGecko, you can stay updated with prices, charts, profits, and loss of capital at CoinStats.
See more: Instructions for using margin effectively for trader
Crypto portfolio management strategy when making money from Crypto
To manage your portfolio effectively, you need to outline a specific strategy. Below are the things traders need to pay special attention to when building a Crypto investment portfolio.
Managing Assets in Crypto Portfolio
The basic element of creating a Crypto portfolio is the types of assets in it. Depending on your needs and trading purposes, you can choose many different digital assets.
If you want to limit risks, you can choose blockchain tokens, launchpad tokens, gaming NFTs, or derivative tokens. Which, blockchain tokens are highly appreciated by the Crypto community for their low risk in the virtual currency market. Some other traders use launchpad tokens to raise capital through public sales, and private sales,…
Divide your initial investment capital and avoid putting all your eggs in one basket. This will help you avoid the risk of losing everything when you cannot keep up with market trends.
Control profits and risks when applying Crypto investment methods
Don’t skip the step of determining the profit and measuring the risk level of your Crypto portfolio. This is the way to help you allocate capital to each type of asset reasonably. At the same time, you can also make a profit and stop loss in Crypto trading.
To determine profit, you can base on the following factors:
- Compare capitalization with projects in the same segment of the market.
- Assess the cash flow on the network on which the project is built.
- Evaluation based on the team behind the project, and the investors.
To measure the risk when making money from Crypto, you can apply two ways:
- Qualitative: Estimates the price decline based on fundamental and predictive analysis of the protocols.
- Quantitative: Estimated through historical transaction data, and recent analysis.
Steps to build a Crypto portfolio that investors should not ignore
Below are three steps to build a portfolio in the Crypto market that traders should refer to and apply.
Plan to set up a Crypto portfolio
When planning to build a Crypto portfolio, traders need to keep four important factors in mind:
- Determine your portfolio goals. The goals should be consistent with the trader’s knowledge base and trading experience.
- Trader’s risk tolerance.
- Determine Crypto investment timeframe: The longer the investment timeframe, the lower the risk.
- Liquidity needed: If you don’t have much capital, you should participate in airdrop or IDO projects. This will help you increase your profits significantly.
See more: Open an Bybit account – explore the crypto exchange
Trader executes the original plan
From the plan that has been set out, you should start setting up an investment portfolio. You need to pay attention to managing the asset classes in the portfolio and determining the profits and risks that may be encountered. The goal of implementing the plan is to help investors create a suitable portfolio, optimize profits, and manage risks.
Crypto trading review
In this step, you should evaluate the fluctuations in the financial market in general and the cryptocurrency market in particular. From this data, you will know how to reallocate capital appropriately in each transaction.
To take advantage of the daily price fluctuations of Crypto, you can consider applying scalp treatment. This is a short-term trading method, helping traders gain many small profits during the day.
Conclude
The above article has helped readers learn in detail about a Crypto portfolio, and how to set up an investment portfolio when making money from Crypto. Traders need to regularly follow market news, and update the latest price trends to manage their assets. Don’t forget to visit Crypto Trading to learn more useful Crypto knowledge!
FAQs
Here are some frequently asked questions when traders learn about Crypto portfolios.
Portfolio management strategy for short-term or long-term trading?
Portfolio building and management can be applied in the long term, short term, or both. This depends on your understanding of the market and your ability to identify risks when making money from Crypto.
What factors should be considered when choosing a coin/token to invest in?
There are three factors you need to keep in mind when choosing coins/tokens in Crypto investment:
- Narrative: Identify which segment of the market the Crypto you are holding belongs to.
- Ecosystem: Learn about projects developed on Crypto ecosystems.
- Market Cash Flow: Determine the current cash flow trend.
What are the common mistakes when managing a Crypto portfolio?
Some traders just invest emotionally without a clear plan. In addition, many traders are subjective and do not thoroughly research the cryptocurrency market. This can cause you to make mistakes when making money from Crypto.
