What do hoarders and crypto investors have in common? They both collect trash. I get it, when you have the future of finance at hand, it’s tough not to buy everything you see. There’s DeFi, NFTs, privacy coins, smart contract ecosystems, and so on. With so many assets, you’ll build a portfolio or two, and that’s where the real problems begin.
Investing becomes a mess because who can track more than one portfolio in a volatile market such as crypto? I have to log into different wallets or exchanges and each one has a unique password kept in a notebook hidden under my mattress – it’s manmade terror beyond our comprehension. But don’t fret, I’m going to make your life easier by showing you how to manage multiple portfolios successfully.
What Is a Crypto Portfolio?
A crypto portfolio represents a group of digital assets to which you have allocated capital. A cryptocurrency portfolio can be as small as one asset, but it can also hold hundreds of assets. What matters is that the portfolio holds digital assets stored on a blockchain ledger, and not stocks, metals, or commodities.
A cryptocurrency portfolio consists of digital assets such as Bitcoin, Ethereum, Solana, and Cardano. But apart from these blockbuster titles, you also have more than 5,000 cryptocurrencies at your disposal. Everyone can create their own cryptocurrency, which is why so many exist.
The crypto market has a rich ecosystem with assets and decentralized applications that dabble in various use cases. Developers compete to build the best project for any given use case. And with so much money at stake, you have lots of projects competing for the products, like a decentralized exchange or NFT marketplace. Think of it as if every company on earth had its own token.
Suddenly, it’s a lot clearer why so many cryptocurrencies exist. And with so many assets, it’s hard not to invest in almost all of them. But how do you properly diversify your holdings?
Should You Have a Diversified Portfolio?
You can’t simply invest in one cryptocurrency. Not only is it not fun, but it also keeps you from seizing significant gains. That’s why you have to invest in plenty of assets and own a diversified portfolio. But how do you achieve financial diversity?
Owning a diverse portfolio means buying multiple assets. You might buy assets for store of value, smart contracts, synthetic markets, lending, decentralized finance, or exchange utility tokens. You might also introduce diversity by yield farming assets or swapping ETH for a cool picture of a monkey with your digital signature on it.
Whatever you do, being everywhere in the market is the main goal behind diversification. You need to invest in assets from all use-cases so that you increase your chances for profitability. But you don’t want to create a portfolio and store everything in one crypto wallet. And you can’t, even if you wanted to.
Many blockchain networks exist and each token is tied to one. A Bitcoin wallet only holds Bitcoin. An Ethereum wallet holds ETH, ERC-20 tokens, and ETH NFTs. And if you want more underground altcoins, you have to create a separate wallet for Avalanche, Solana, or Terra.
I’m on most of the networks mentioned and let me tell you, my life is a nightmare. I have to log into Phantom, Exodus, and Metamask to access my assets. I have four separate Phantom wallets on two browsers and I log into each one every single day to look at my precious NFTs.
You might want to give up at the thought of micromanaging highly-sensitive and volatile digital assets. However, there’s no need to worry. Managing and tracking the performance of your portfolios is made easier with the use of a special tool: a crypto portfolio tracker.
What Is a Crypto Portfolio Tracker?
A crypto portfolio tracker is an app or platform that helps you monitor and manage digital assets. The tracker reports the value of your assets in real-time and allows you to sell, buy, or trade assets by interacting with exchanges and 3rd-party trading platforms.
The purpose of a tracker is to make your life easier by helping you view and control multiple portfolios, while also granting access to features that improve your investing or trading experience. The platform might give you the opportunity to:
- Execute multiple trades at once
- Apply portfolio stop losses
- Manage assets from multiple exchanges or wallets
- Monitor price performance for all owned assets from a single interface
A guy like me might be invested in assets from four blockchain networks, but that doesn’t mean my life has to be hell. I can save time by using an app that allows me to manage all of my portfolios and wallets from one spot.
These platforms can even do outstanding things such as documenting your transactions for tax reporting, automating trades, and receiving alerts for price movements. Plus, you don’t have to worry about security since portfolio trackers rarely have full control over your assets and they can’t move assets without your order.
Crypto Portfolio Tracker: Pros and Cons
Crypto portfolio trackers are good, but they’re not perfect. In exchange for convenience you might have to suffer a little bit. What kind of suffering? Let’s find out.
Portfolio trackers have numerous advantages, including:
- Feature-rich interface
- Low subscription prices
- Access to numerous assets and exchanges
- Reporting and documentation tools
However, they can be disadvantageous due to:
- Server instability
- Order execution fails
- Expenses coming from paying for premium features
Do note that each crypto portfolio tracker is different. One might be rich with features while another one may have limited functionality. Some are free but clunky and don’t feature regular updates. And some are so expensive that buying a subscription is not worth it unless you manage serious money.
Alternatives to Portfolio Trackers
Without a portfolio tracker or other crypto software, you’ll have a difficult time managing multiple portfolios successfully. But if you’re decisive enough to be a Wall Street-grade portfolio manager, you’ll do a great job even without software. You might want to do so if you don’t find portfolio trackers useful or if you don’t want an app other than your wallet to interact with your capital. If that’s the case, you can go down the semi-offline route.
You can create a spreadsheet for each portfolio and input your assets and their allocations. To monitor their performance, you can manually record price data from CoinMarketCap for each asset or write a Python script that automatically pulls the information for you.
Alternatively, you can use a portfolio tracker that doesn’t access your assets. On an app like Blockfolio, you can create an imaginary portfolio and track the performance of your assets. The app will report their live price and your profits, but you won’t be able to sell or buy anything. Plus, you still have to record every change you make, like selling a portion of an asset or adding more capital to your portfolio.
If you want an app that’s not only a portfolio tracker but also a trading bot and portfolio manager, I recommend Shrimpy. Shrimpy is an automated portfolio management platform that connects you with more than 16 exchanges and allows you to execute trades and switch portfolio allocations with the click of a button.
Want to learn more about efficient portfolio management? I recommend reading the following articles: