Whether you’re brand new to crypto or a seasoned investor, there will be one constant in your investing journey, and that’s your crypto portfolio. Building a well-structured portfolio is essential to managing risk and maximizing returns. We’re going to explore what a crypto portfolio is, how investors make a portfolio, and the tools you can use to track your investments over time.
Let’s dive into the fundamentals of creating your first portfolio and maintaining it for your entire crypto investment journey.
What Is a Crypto Portfolio?
A crypto portfolio is a collection of cryptocurrencies that an investor holds, much like a stock portfolio. It can include a variety of digital assets such as Bitcoin, Ethereum, altcoins, and stablecoins. The key to building a successful crypto portfolio is to diversify your holdings, which helps spread out risk and increases the potential for returns across different projects and market sectors.
Much like how TradFi investors aim for a diversified mix of stocks, bonds, and commodities, crypto investors also seek a balance of high-growth projects, stable assets, and emerging technologies. Building the best crypto portfolio requires a strategy that fits your investment goals, risk tolerance, and market knowledge.
How Investors Form Their Crypto Portfolios
When creating a crypto portfolio, the first step is understanding allocation. Allocation refers to how you distribute your funds across various assets. This helps mitigate risk by ensuring you’re not overly exposed to the ups and downs of a single coin.
Here’s an example of how you can think about allocation in your portfolio:
- Core Holdings: Large, established cryptocurrencies that tend to be more stable. They should comprise a significant portion of your portfolio (e.g., 40-60%).
- Mid-Cap and Altcoins: Smaller projects that have strong potential but come with higher risk. You might allocate 20-30% of your portfolio to these assets.
- Emerging Projects and Stablecoins: Stablecoins provide security and liquidity, while newer projects you believe in may offer stability or profit over time. A typical allocation here is 10-20%.
Even large firms like BlackRock and a16z (Andreessen Horowitz) are building diversified crypto portfolios, emphasizing the need for solid tracking and allocation tools in this space. New and advanced crypto investors can find it helpful to track and analyze big portfolios of well-known industry traders or investors like the large firms mentioned above.
If you want to keep up, you can find out more about BlackRock and a16z on Arkham Intelligence here and here.
You can also track and analyze a16z’s investments here and dive further into BlackRock through this article.*
*Qoda Finance is not responsible for data accuracy from third-party sources.
Tracking Your Portfolio Over Time
Once you’ve built your crypto portfolio, tracking its performance is key to making informed decisions and essential to managing your investments.
Several apps and platforms make it easy to monitor your portfolio’s performance, such as:
- CoinMarketCap and CoinGecko: These popular apps allow you to track your holdings, see real-time prices, and get a bird’s-eye view of the market.
- Debank: A DeFi portfolio tracker that not only tracks your assets but also gives a comprehensive view of your decentralized financial activities, including staking and lending.
- Shrimpy: A robust portfolio management tool that lets you track, rebalance, and automate your crypto strategy across multiple exchanges.
- 3Balance: An excellent tool for both beginners and advanced users, 3Balance goes beyond just tracking. It helps you visualize your portfolio, plan your allocations, and execute trades offering powerful rebalancing features that make it easy to maintain a balanced crypto portfolio semi-automatically.
Rebalancing Your Crypto Portfolio
Over time, your portfolio’s allocation will drift as certain coins outperform others. This is where a tool like 3Balance shines. The platform offers automated rebalancing in just three steps. Old and new investors should rebalance regularly to capitalize on gains, minimize loss, and keep their portfolios within their strategy and risk tolerance.
Ready To Build Your First Crypto Portfolio?
Building and managing a crypto portfolio requires careful planning, smart allocation, and consistent monitoring. With the right balance of core holdings, altcoins, and emerging projects, along with the help of a solid crypto portfolio tracker, you can navigate the cryptoverse with confidence. Just keep your long-term goals in focus and remember to rebalance!
Try 3Balance today! It's free.
Manage your crypto portfolio like a Pro: set up your ideal allocations, swap multiple tokens in one flow and much more. Check it out!
