In this article, we’ll answer the most popular questions about crypto portfolio management. It’s an addition to our guide on everything from portfolio building and tracking to diversification and rebalancing.
What is crypto portfolio management, and how do I build and track my portfolio?
What is a crypto portfolio?
A crypto portfolio is a compilation of digital assets owned by an investor. Your crypto portfolio consists of tokens, coins, NFTs, and other crypto assets.
What is crypto portfolio management?
Crypto portfolio management involves strategically forming, monitoring, and optimizing crypto investments. It involves techniques to balance risk and reward while achieving specific financial objectives for this type of investment. Effective management requires understanding market trends, diversification, and leveraging tools to track and analyze asset performance.
Read our guide on everything crypto portfolio management for a deep dive into this topic.
How do I build a crypto portfolio?
In a nutshell, building a crypto portfolio requires specific steps:
- Understand your investment goals and strategy, as well as risk tolerance.
- Choose which tokens you want to invest in and decide on allocation sizes.
- Diversify between assets, sectors, asset types, etc.
- Monitor your portfolio to understand its performance and exposure.
- Apply rebalancing, buy and sell tokens based on your goals and strategy.
To learn more, read this article about building a crypto portfolio.
How do I monitor my portfolio?
There are a few ways to monitor your portfolio:
- Using your web3 wallet
- Using blockchain explorers
- Using specific portfolio management tools
The first two can be challenging, as complicated workflows can sometimes make wallets and explorers confusing.
Specific tools, like 3Balance for on-chain assets tracking and rebalancing portfolio or DeBank for both assets in your wallets and positions in DeFi protocols, are more advanced and have simplified interfaces, so everyone can quickly start using them.
What is the best app to follow crypto charts?
Some portfolio management tools have built-in functionality for crypto price charts, but we recommend using industry-leading solutions like TradingView, Coinmarketcap, or Coingecko.
These tools have websites and applications to monitor your portfolio performance from desktop and mobile devices.
What is the best live crypto tracker?
Try 3Balance for tokens and coins in your wallet or DeBank for positions in DeFi protocols.
To learn more about crypto wallet trackers, read this article.
How do I assess my crypto portfolio performance?
Let's define the most common strategies to assess a crypto portfolio performance:
- Track Your Portfolio Value: Compare the initial value, the value when you started vs the current value.
- Calculate Return on Investment (ROI): ROI measures the performance of specific assets or the entire portfolio. Here's an example: If you invested $1,000 and now it's worth $1,500, your ROI = 50%.
- Check Your Sharpe Ratio: It measures risk-adjusted returns. The formula is: Portfolio Return − Risk-Free Rate / Portfolio Volatility = Sharpe Ratio, where the higher ratio is better.
- Time-Weighted Rate of Return (TWRR): TWRR eliminates the impact of deposits and withdrawals and shows the actual performance of investments over time. This is especially useful for crypto due to its frequent inflows and outflows.
- Compare Against Benchmarks: Use popular benchmarks (e.g., Bitcoin, Ethereum, or crypto indexes like CMC200 or DeFi Pulse Index) to gauge how your portfolio performs relative to the broader market.
- Analyze Profit and Loss (P&L): Unrealized P&L: Gains/losses on assets you still hold. Realized P&L: Gains/losses on assets you've already sold.
Which crypto to buy?
The answer to this question depends on your strategy and risk tolerance. Some people prefer meme coins, where you can lose your deposit in hours or even minutes. Others take a more conservative approach and invest only in less volatile blue-chip assets. Some combine the best of two worlds with moderate risk.
Read the article to learn more.
How do I track my crypto transactions?
Crypto transactions can be tracked using:
- Crypto Wallet: Most wallets have an "Activity" section where you can check your transactions.
- Blockchain Explorers: You need to know your wallet address and the network in which a transaction was made. Find the corresponding network explorer and enter your wallet address into its search bar.
- Portfolio management tools: DeBank allows you to track transactions and DeFi positions. 3Balance shows your wallet balance with allocations in percentages.
How do I manage my crypto portfolio?
What is a good balanced crypto portfolio?
A well-balanced crypto portfolio typically includes a diverse mix of coins or tokens. This variety across different types of blockchain projects and market sectors helps to manage risk and potentially increase returns. This mix of assets is referred to as diversification.
Crypto portfolio diversification spreads investments across various cryptocurrencies to reduce risk and improve potential returns. Investors allocate capital across multiple assets instead of putting all funds into one asset.
Learn about portfolio diversification.
How should I split my crypto portfolio?
You can find an example here. However, remember that each investor's goals, strategy, and risk tolerance determine a portfolio’s allocations.
How do I diversify my crypto portfolio? How many crypto coins and/or tokens should I have?
The general practice of diversification can be based on the following principles:
Invest in different sectors, blockchains, and use cases. Do not invest in the same type of projects on the same blockchain.
Market capitalization. Tokens with a larger market capitalization may be more stable, while small-cap assets may be more exposed to volatility while having a larger room for potential growth.
Asset utility. When investing in tokens, consider their utility. A token's real economic utility, such as fee sharing, can affect its demand.
Geo-base diversification. Consider risks related to legal conditions in different jurisdictions.
Don't over-diversify. While diversification helps manage risk, over-diversifying across too many assets can dilute potential gains and make it harder to track your portfolio effectively.
Rebalance regularly. Keep an eye on your portfolio and rebalance it periodically to maintain your target allocations, especially if one asset becomes too dominant after significant gains.
How do I add crypto to my pre-existing investment portfolio?
If you invest most of your money in traditional financial instruments and want to add crypto to your portfolio, determining how much to allocate to cryptocurrency depends on your financial goals, risk tolerance, investment timeline, and understanding of the crypto market.
It is better to start small (1-5%), which can be considered a conservative strategy. Over time, you can start investing more aggressively and increase your allocations based on market conditions, performance, and experience. The same is true for decreasing your exposure to crypto.
Should I rebalance my crypto portfolio?
Crypto portfolio rebalancing is the process of adjusting the weightings of assets in your portfolio to maintain a desired allocation. In other words, you conduct trades to ensure you have the right amount of each asset value. Over time, the value of your individual assets in your portfolio fluctuates, creating an overall shift in the balance. Without regular rebalancing, your portfolio could become riskier or more conservative than you intended. Rebalancing brings your portfolio back to your original investment strategy.
It's no secret that cryptocurrencies are considered volatile compared to RWAs and traditional investments (with some exceptions). Rebalancing your crypto portfolio is crucial because it helps you manage this volatility. It enables you to protect yourself from overexposure to high-risk baskets while also ensuring you're not missing out on potential gains from other assets in your crypto portfolio.
A different approach says you shouldn't rebalance at all: just set the goals correctly and passionately wait until your portfolio reaches those goals. This approach is more risky but potentially yields more gains.
How do I hedge my portfolio?
Hedging a crypto portfolio involves strategies to minimize risk and protect against potential losses in the highly volatile market. Here's how you can hedge your crypto portfolio:
- Diversify your portfolio
- Use stablecoins
- Hedge with options, futures, and perpetual swaps
- Use stop-loss orders
- Apply Dollar-Cost Averaging (DCA)
- Utilize crypto index funds
What does managing your crypto assets actually mean?
Managing crypto assets involves tracking (monitoring), optimizing, and securing your portfolio to meet your financial objectives.
This process includes diversifying your holdings, monitoring market performance, and leveraging strategies like staking, yield farming, or active trading to boost potential returns. It also emphasizes safeguarding your investments using reliable wallets, robust security practices, and trusted platforms while staying informed about market trends and regulatory updates.
How do you grow your crypto portfolio?
Everything starts with strategic planning. Build your portfolio by considering your financial goals and taking risks wisely.
To grow your portfolio, consider the following strategies:
- Diversification. It helps you spread investments across sectors, narratives, and trends.
- Staking, providing liquidity, lending—don't just hold your assets; put them to work to earn additional income.
- Invest in ICOs. This way, you can obtain tokens at the sale price, but be careful and do your due diligence.
- Apply DCA. Dollar-cost averaging reduces the risk of mistiming the market and builds your portfolio steadily over time.
- Trading. Learn to trade strategically using spot and options, swing trades, and arbitrage.
Be extremely careful and understand the risks involved in the strategies above, as they can lead to capital loss.
Which crypto to buy in 2025?
When considering what crypto to buy for 2025, focus on projects with strong fundamentals and growth potential. Below, we’ve collected assets that many analysts and the crypto community predict are interesting investment options. This is not financial advice; the list below is for educational purposes only.
1. Bitcoin (BTC)
Due to its limited supply and widespread adoption, Bitcoin remains a stronghold for investors. The possible institutional adoption of Bitcoin is expected to boost its price further.
2. Ethereum (ETH)
Although Ethereum is an "old" and "expensive" blockchain, it has a unique ecosystem, liquidity, and user trust.
3. Promising Altcoins
Some examples are:
Sui (SUI): Fast and cheap Layer 1 using Move language.
Chainlink (LINK): Leading the decentralized Oracle market.
Solana (SOL): A high-performance blockchain for decentralized applications.
Toncoin (TON): Telegram's Open Network native asset.
Render Network (RNDR): A decentralized GPU rendering platform.
Stacks (STX): A leading Bitcoin L2
Ondo (ONDO): A tokenization of real-world assets (RWA)
What is the best free crypto portfolio tracker for 2025?
Try 3Balance for tokens and coins in your wallet or DeBank for positions in DeFi protocols.
We hope you found this article helpful! If you have any questions, feel free to ask us on our social media channels.
