Building a crypto portfolio is just like building a business. Putting all your eggs into one basket and failing to diversify is a prelude to failure and financial ruin. If you’re a serious investor, you need an effective strategy to manage your portfolio successfully.
There’s a lot of work and finances that go into making your crypto portfolio good. However, if your portfolio is not properly managed, you will watch all your hard work coach and burn.
This article focuses on the steps you can take to manage your crypto portfolio successfully.
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Tips for managing your crypto portfolio
Having a balanced portfolio is important to the success of your crypto portfolio. Listed below are some tips and insights to help you manage your crypto portfolio successfully and make the best out of it.
Dollar-Cost Averaging (DCA)
Wikipedia defines dollar-cost averaging as an investment strategy that involves applying value-adding principles to regular investment opportunities.
Many investors adopt a Dollar-cost average to buy more stocks at very low costs and fewer stocks at high rates. It involves setting up a system that automatically sells your coins in certain percentages depending on your market goal.
Dollar-cost averaging is an excellent way to manage your crypto wallet by creating a balance that enables you to obtain more shares when the market prices drop and gain a substantial amount of shares when prices are high with fixed dollar amounts investments. Here are some steps for dollar-cost averaging:
- Decide on a budget for investing.
- Determine the frequency of your investment, i.e. monthly, weekly, etc.
- Determine how many sections you want to split your investments into
- Be consistent with your investment plan.
Make Rational Decisions
Managing the crypto market can be nerve-wracking, what with the constant ups and downs. There is also a lot of buzz around the crypto and blockchain universe, making it easy for crypto investors to make rash decisions.
Making rational decisions will help you manage your crypto wallet successfully. For instance, when there’s a dip in the market, the natural intuition is to sell your coins before it falls any further.
Furthermore, making rational decisions helps you decide when to sell your coins and how much you should sell without completely losing out on the market.
Emotional decisions could be rash and often turn out to be wrong decisions. As a crypto investor, it is wise to make rational and logical decisions to grow your portfolio successfully.
Diversify your crypto portfolio
It’s never a good idea to put all your eggs in one basket, which is also applicable to your crypto portfolio. Diversifying your portfolio simply involves putting your investments in different directions to create more room for profit. Making diverse crypto investments is a great way to manage your crypto portfolio. Here are some steps to help you diversify your portfolio:
- Different Cryptocurrencies
You can diversify your portfolio by investing in different cryptocurrencies, preferably high performing currencies. There are several options to choose from, ranging from private coins, tokens, and altcoins.
- Different locations
Another means of diversifying your crypto portfolio is to invest in coins from different countries and continents.
- Different industries
Making crypto investments in various industries or in coins that are useful in various industries is a great way to diversify your portfolio and boost the success of your portfolio.
- Strategic times
This involves diversifying your crypto portfolio over time. A lot of market research is required to achieve this. Knowing all there is to know about your coins, tokens and currencies and knowing the best times to invest in certain coins helps you maximise your crypto portfolio.
Use a crypto portfolio tracker
Crypto portfolio trackers refer o any app or website that allows crypto investors to keep track of their investments and the trends in the crypto market.
A crypto portfolio tracker is an excellent tool to help you manage your crypto portfolio and stay on top of the trends to help you make the right choices and boost growth.
There are several crypto portfolio trackers in the markets, such as Phoenix, CoinSmart, CoinStats,etcs. Coinstats is one of the best crypto portfolio trackers in the market. Here are some features of coinstats that make them useful for managing your crypto portfolio:
- Enables crypto research
Coinstats provides real-time information on the prices of different cryptocurrencies at different places on one platform. This makes it easy for even beginners to track and manage their crypto portfolios.
- Manage your crypto transactions and investments
A Crypto portfolio tracker allows users to manage transactions and exchanges in their portfolio and keep track of profits, losses, and opportunities for growth.
- Analysis and alerts on your portfolio
A crypto portfolio tracker like coinstats provides real-time analysis and alerts on your portfolio to help you keep up with your crypto investments and holdings.
When choosing a crypto portfolio tracker, it’s important to ensure that it has all the necessary features to make managing your crypto portfolio easier and more effective such as research management and analytical features.
Have an exit strategy
An exit strategy is like a backup plan. It could be a strategy put in place to manage losses or failures in investments. It could also be a strategy to maximize profits or a successful investment.
Either way, an exit strategy aims to ensure that you do not meet a dead end. As a crypto investor, here are some exit strategies you can adopt:
- Exit and sell at price targets
Consider having ten bitcoins, and the market price rises. You can divide your bitcoins into different sections and sell them at different prices instead of pulling them out of the market completely.
- Exit by return
This type of exit strategy involves selling your returns and pulling out your profit instead of pulling out completely. This method can also be applied when you meet your target in the market.
- Dollar-cost average out
This strategy involves setting a selling plan that determines how many coins you sell per day, how much they are sold, and what percentage you want to sell per week.
There are so many other crypto exit strategies that you could adapt depending on your goals and preferences.
Keep close watch on crypto news and information
One way to ensure that your portfolio is up to date is to keep a close eye on crypto-related news. Make sure you’re in the know about all things crypto so that you’re aware when something new is introduced to the market, and you don’t miss out on any opportunities.
The crypto market is a volatile space with lots of ups and downs. There are numerous currencies in the market and even more investment opportunities.
Keeping your head above water and building a successful crypto portfolio can seem overwhelming. But taking the right steps and putting in the work will help you build a portfolio that stands out.
Good management of your crypto portfolio would lead to the growth of your portfolio and help you handle your investment choices better.