WHAT IS CRYPTOCURRENCY PORTFOLIO
A cryptocurrency portfolio is a collection of digital assets that includes cryptocurrencies. By combining and diversifying their crypto holdings, crypto investors hope to increase their risk-adjusted returns.
For many newcomers to cryptocurrency, investing in it entails purchasing and keeping Bitcoin. Did you realize there are over 10,000 different cryptocurrencies? on a dashboard for you. Portfolio trackers make it simple to keep track of how much money you’ve put into each coin. If one cryptocurrency outperforms the others, it will take a bigger share of your entire portfolio. You can’t afford to acquire all 10,000 for your portfolio, and you certainly don’t want to.
5 WAYS TO MANAGE YOUR PORTFOLIO
You’re halfway to having a long-term crypto portfolio if you have a well-balanced crypto portfolio. Investing in digital assets is a relatively new concept that comes with a slew of scary jargon.
Before jumping in headfirst, take the time to study and examine them thoroughly. If you’re ready to get started, here are five pillars to assist you achieve that balance and do your cryptocurrency portfolio management.
DOLLAR COST AVERAGING
dollar cost averaging (DCA) is an automated strategy for investing a predetermined dollar amount regardless of the price of a token. By making your investment in regular amounts, you can avoid the stress that comes with bad timing.
In a strong bull market, you can add more shares if the crypto currency’s price rises. Because your investment amount in fiat terms remains stable, you will be able to add even more shares if the crypto currency’s price falls.
USE OF CRYPTO PORTFOLIO TRACKER
Crypto portfolio monitors are one solution to this issue. A crypto portfolio tracker is software that pulls the data from your wallets and presents it on a dashboard for you. Portfolio trackers make it simple to keep track of how much money you’ve put into each coin. If one cryptocurrency outperforms the others, it will take a bigger share of your entire portfolio.
BE RATIONAL
Fear of missing out (FOMO) is a significant reason why traders struggle to manage their portfolios. Emotions often lead to the purchase of a high-priced asset, only for a significant correction to follow. Also, when the market loses 30%, we may feel concerned since we don’t know if the correction will deepen and become a 70% correction.
DEVELOP STRATEGY
An exit strategy should be part of every solid plan. Dopamine is released from our brain when our trades succeed, according to science, helping us feel good about our choices. In the absence of an exit strategy, we will be compelled to stay in the position as a feedback loop develops.
More profits mean more dopamine, and more dopamine means we’re more likely to stick with the transaction. Then, if the market falls, An exit strategy should be part of every solid plan. Dopamine is released from our brain when our trades succeed, according to science, helping us feel good about our choices. In the absence of an exit strategy, we will be compelled to stay in the position as a feedback loop develops. we expect that it will recover. In the best-case scenario, the cryptocurrency market recovers. However, there is a worst-case scenario: the correction continues to worsen.
DIVERSIFY YOUR PORTFOLIO
Diversifying your investments is an important part of a smart portfolio management approach. You’ve probably heard the phrase “don’t put all your eggs in one basket.” You don’t want to lose all of your eggs if the basket falls over.
Fast-moving, high-performing cryptocurrencies are surrounded by a lot of hype. Some of the excitement is justified, since several Cryptos have a bright future ahead of them and solve real-world issues. Other Cryptos tackle real-world problems as well, yet traditional business and banking continue to rule our world.
