In this article, We are going to know what is Crypto assets and what is the process of Crypto Assets Management?
Crypto asset management can be considered an evolution of traditional asset management, where cryptocurrency has replaced the stock and bond markets as the main investment focus.
Asset management is not a new practice, but managing a crypto asset portfolio or portion of a portfolio is newer practice than its traditional form, which uses fiat currency and physical assets such as gold as investment vehicles.
What Are Crypto Assets?
A crypto asset is a digital asset that uses cryptography for security, The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by a person or group of people operating under Satoshi Nakamoto.
As of May 2018, there were over 500 different cryptocurrencies in existence, with a combined market capitalization of over $300 billion USD.
Crypto assets are secure and anonymous but can be extremely volatile and hard to value accurately.
The core principles of crypto assets are that they are: secure, anonymous, decentralized, and are not controlled by a single entity.
A user cannot transfer any other asset directly to another user’s wallet without involving a third party.
Instead, users can send crypto assets to each other through their own wallets.
What Is Crypto Asset Management?
Simply put, crypto asset management is purchasing and selling digital assets to be used as investments while managing a portfolio to experience an overall growth in value.
Asset management is not a new practice, but managing a crypto asset portfolio or portion of a portfolio is.
In fact, according to one study, approximately 85% of all token sales are managed by professional firms.
Additionally, it was found that 25% of hedge funds already have at least some cryptocurrency holdings.
Some companies like Coinbase are even developing ways for investors to link their financial accounts to create a diversified crypto-asset portfolio within minutes.
This is just further evidence showing how valuable having an experienced group monitor your portfolio can be.
Related Article: What is Tokenomics? – Guide on Crypto & Tokens
How to Add Crypto Assets To Portfolio?
Before you add any crypto assets to your portfolio you should know what’s going on in your portfolio.
Track returns against benchmark indices including S&P500 and more, set target allocation percentages across sectors, invest using simple models such as dollar-cost averaging, or look up details on individual stocks including dividend yield (DY) as well as relative strength index (RSI) based signals – all from one place.
All positions can be marked with your own ratings so that it is clear how much conviction you have behind each investment decision.
Crypto Assets Portfolio will help you manage risk efficiently without sacrificing performance by providing a suite of tools for risk management and portfolio optimization that are accessible anytime and anywhere.
The Crypto Portfolio mobile app includes alert notifications for individual holdings, news stories relating to your holdings, key metric graphs like return vs market value of equity (ROE), etc., which can be viewed on a mobile device at a glance.
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Pros of Crypto Asset Management
The growth of cryptocurrencies has attracted many individuals who wish to invest in digital assets.
If you have been investing for a while, you may be wondering if managing your own portfolio is more beneficial than simply purchasing one or two currencies and holding on for a rise in value.
Cost-Effective – Managing an asset portfolio allows you to buy and sell as needed at a fraction of an exchange fee.
When purchasing through an exchange like Coinbase, you pay a .50% exchange fee when selling under $100 worth of currency.
For larger transactions that cost can rise quickly making it difficult to get a return on investment without being in control of what you are doing.
Cons Of Crypto Assets Management
It’s complicated, it’s difficult to do well (even for professionals), and it’s easy to make mistakes that cost you a lot of money.
And even if you do everything right there are often other factors outside your control that influence crypto asset prices. There are also no insurance mechanisms for those who lose their assets.
So why even bother with crypto asset management? Simply put, because gains can be so great.
The growth experienced in 2017 in particular has made crypto-assets look like one of the most lucrative investment opportunities ever created.
While past performance is not indicative of future results, many experts see blockchain technologies as an enormous opportunity that will continue to grow in value over time.
How To Start A Crypto Asset Portfolio (Safely)
Cryptocurrencies are a volatile investment, but when done correctly can provide stellar returns.
Managing your crypto assets requires research and foresight, It is important to know that many exchanges require AML/KYC (Anti-Money Laundering/Know Your Customer) verification on all transactions over certain thresholds.
If you do not wish to register with an exchange, or simply have privacy concerns there are options to use in tandem with exchanges such as LocalBitcoins or Mycelium Local Trader.
Tools For Tracking Crypto Asset
Every crypto asset holder wants to know where their assets are at, which can be a difficult task if you hold multiple digital assets.
With new coins and tokens being added to exchanges every day, keeping track of everything can be an exhausting task.
Luckily there are several tools available that make tracking your portfolio’s performance relatively simple.
Here is an overview of four such tools: cTrader, Blockfolio, Delta, and CryptoCompare. Each offers slightly different features, so we encourage you to research each before deciding on one that works best for your needs.
However, once you’ve found a tool with features that best fit your investment strategy and level of experience in cryptocurrency investing it’s easy to get started with even just basic crypto knowledge.
cTrader Proprietary software developed by EXMO Finance allows users to track various cryptocurrency portfolios in one place while managing trades through execution via more than 80 exchanges around the world.
Related Article: Top 10 Decentralized Exchange App(s): DEX Applications
Tips For Safe And Successful Investing In Crypto
Do your homework. Know how to manage risk by diversifying your portfolio. Know when to sell by monitoring projects and market trends.
In crypto, it’s not easy making money if you don’t know what you’re doing but there are ways to hedge your bets and increase your potential returns while keeping things as safe as possible.
Not everyone will do well with crypto investing but then again, neither will everyone succeed in investing in any other type of asset.
Goals of Crypto Asset Management
Creating a crypto asset management portfolio can help someone maximize returns on a smaller amount of capital and cut down on risk as well.
With careful planning, it is possible to manage a portion of your overall investment portfolio in crypto assets.
By following certain principles, there’s a high probability that you will increase your overall return without compromising on risk.
In fact, properly managing your crypto asset portfolio could increase your overall return while reducing your risk.
The two main components to consider when creating a crypto asset management strategy are what percentage of your total holdings should be made up by cryptocurrencies and which cryptocurrencies should be included.
Related Article: Cryptocurrency Economy: Crypto Grows Despite Market Volatility
It’s important to understand what you are investing in and how it works. Cryptocurrencies, like stocks and other assets, can go up or down over time.
There is no guarantee that a particular cryptocurrency will increase in value, either, The value of a cryptocurrency may be influenced by speculative market factors, governmental regulation, and many other factors.
While these trends may have an effect on cryptocurrency values over time, it is not possible to predict their effects for any individual cryptocurrency project.
Nitin is a professional data Engineer, Who has a Post Graduation in Data Science and Analytics and working in the healthcare sector. Experts in Data analysis, Machine learning, AI, blockchain, Data related tools, and technologies. He is the Co-founder and editor of analyticslearn.com