Given how volatile cryptocurrencies can be, trading them can be equally parts rewarding and stressful. Crypto day traders looking to leverage on price movements, often face enormous risk with equally high rewards.
And because of this, a new generation of investors has risen up to the challenge of managing their crypto assets.
But even if you are not a crypto day trader, there are still plenty of reasons why you should consider investing in crypto. The high rates of return earned from cryptos like Bitcoin and Ethereum make these assets a worthwhile long-term investment.
This approach is known as HODLing – a humorous misspelling of the term “holding”. These investors buy and hold cryptocurrencies with the expectation of long-term capital gain.
All of this is well-and-good, but pointless if you don’t organize your assets. A well-organized crypto portfolio ensures that your risk exposure is kept to a minimum, while still being agile enough to leverage on new opportunities.
So, How to Organize Your Crypto Assets?
Contents
After sitting down with a team of expert investors, they had this to share with us:
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Learn how to chart cryptos
Charting is one of those skills we often hear about but don’t really understand. To put it simply, charting is the process of presenting relevant data in an easy-to-understand visual format.
Crypto charts are extremely useful because they help investors identify and examine potential trends, and make price predictions. From here, investors can develop an action plan that will allow them to profit from these price movements.
Typically, most crypto charts catalogue price changes or the rate of return against time. Candlestick charts are one of the most popular types of crypto charts as they help investors analyze crypto price movements throughout the trading cycle.
Check out our list of Bitcoin trading tools for investors here: blog.tezro.com/best-crypto-charts/
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Keep yourself up-to-date
While cryptocurrencies like Bitcoin are valued for their decentralized and unregulated nature, their prices are still affected by external market forces.
For example, back in 2021, China’s clampdown on cryptocurrencies caused the crypto market to take a plunge. As a result, Bitcoin and all other cryptocurrencies tanked across the board due to renewed fears of government intervention.
Where in the past, Bitcoin and other cryptos were seen as fringe assets, they have now become a part of the mainstream with both large and small investors.
While this has brought trillions into the market, cryptos now exhibit the same vulnerability as their conventional fiat currency cousins.
This is why it’s important that a crypto investor stays up-to-date with the latest global market developments. A sudden announcement by governments or even celebrities, could lead to a massive bull run or price crash.
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Divide your portfolio into long and short-term investments
Like any investment, cryptos can be demarcated into either long or short-term investments. Long-term investments reward you with capital gains as they increase in price.
Meanwhile, short-term assets provide you with immediate gains that are derived from day trading or via crypto arbitrage.
Given the volatile nature of crypto, some investors may opt to build up a stable basket of currencies i.e. Bitcoin, Ethereum, Litecoin, and Tether as long-term investments, and perform arbitrage/day trading with lesser known, newer cryptos.
At the end of the day, the choice is yours. But always keep in mind that unpredictable price movements can expose you to major risks.
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Consolidate your holdings under a single platform
Instead of relying on Excel or Google sheets, crypto portfolio management software integrates your crypto wallet, and exchanges under a single platform. This makes it possible for you to perform analysis, trade crypto, and make changes to your portfolio seamlessly.
That way, you’re much better prepared to deal with any challenges that the crypto market may throw at you.
Check out our list of the best Bitcoin trading tools for investors here.
While it may appear daunting at first, organizing your crypto assets is much easier than you would think. All you need is a bit of creativity and some effort, then before you know it, you’re ready to go.
