If you’re investing in crypto, it’s important to consider how you want to manage your assets. Much like investors who participate in the regular stock exchange, crypto traders need to pay attention to different strategies, portfolio structures, and techniques to capitalize on the DeFi markets or DEX they invest in.
So, what is asset management in crypto?
Asset Management 101
Crypto asset management is when an investor monitors, buys, and sells digital assets to be used as investments with the overarching goal of achieving overall value growth. Multiple assets make up a portfolio, which can span DEXs, blockchains, and platforms. The broader the portfolio, the more time and effort it takes to manage (unless you work with a DApp like 3Balance that simplifies the process!). Proper asset management is critical to achieving growth.
The 5 Steps of Asset Management:
- Determine an investment strategy
- Construct a portfolio with initial investments
- Include risk management strategies, such as diversification
- Monitoring and rebalancing
- Analyzing and reporting
The Goal of Crypto Asset Management
In general, the goal of asset management is to capitalize on market conditions that allow your bottom line to grow. The scope of the goal and growth depends on the investor’s risk tolerance, preferred strategies, and investment style. In its essence, asset management is wealth management.
How Does Crypto Asset Management Differ From Traditional?
In general, asset management is the same across investment types—you’re monitoring, buying, and selling an asset to see value growth. However, once you move to DeFi and the crypto-verse, there are three main differences:
Asset Classes
Traditional financial market investors typically invest in RWAs such as stocks, bonds, real estate, and other securities. Crypto investors invest in digital assets such as Bitcoin and Ethereum.
Market Volatility
A digital asset is typically considered much more volatile than a traditional asset (with some exceptions). While there are approachable digital assets, serious investors should have a well-defined strategy.
Liquidity
Traditional assets are highly liquid, meaning they can be bought and sold with ease. Digital assets can be difficult to enter or exit a position without price slippage. However, there are plenty of DApps that can help make trades easier.
Are There Crypto Asset Management Tools?
Yes! While some investors choose to go with an asset manager, several crypto ecosystems include crypto asset management DApps like 3Balance by Steadily, the part of the Qoda Ecosystem. These tools can help make crypto asset management easier by executing trades, helping with analysis and asset planning, rebalancing, and allowing investors to visualize their portfolios.
Four Reasons to Use Asset Management Tools:
- Maximize Investment Value
- Make and Monitor Goal Progress
- Ensure Portfolio Diversification
- Understand Your Value For Wealth Management
Rebalance With 3Balance
Rebalancing will be a crucial part of your asset management strategy, and 3Balance is the easiest-to-use app in the crypto-verse. It functions across DEXs, wallets, and platforms, allowing you to rebalance from a single place. No more manually executing dozens of trades. Just select your network, choose the assets you want to rebalance, and hit execute.
Try 3Balance today for 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!
