Crypto asset management is a term that refers to the process of managing digital assets such as cryptocurrencies, tokens, and non-fungible tokens (NFTs). These assets have gained popularity in recent years due to their potential to offer high returns, diversify portfolios, and enable new forms of innovation.
However, crypto wealth management poses significant security, regulation, taxation, and volatility challenges. To address these challenges, various tools and platforms have emerged that aim to simplify and streamline the management of crypto assets.
These tools include wallets, exchanges, custodians, brokers, and advisors. This article will explore the needs and goals of crypto management and its benefits.
Understanding The History Of Cryptocurrency Assets
As stated, cryptocurrency wealth management is crucial in the ever-changing world of cryptocurrency and blockchain. To fully grasp this, you must first look back at the history of crypto assets.
The world’s first cryptocurrency, Bitcoin, was created in 2009 by an unknown person or group using the name ‘Satoshi Nakamoto. This decentralised digital currency was created independently of a central bank or a central issuing authority. As a result of its groundbreaking success, several new cryptocurrencies with their own features and use cases emerged.
A turning point occurred in 2013 with the introduction of programmable blockchains, such as Ethereum. Smart contracts were first implemented on Ethereum, opening the door for creating DApps and native coins.
This breakthrough broadened the concept of crypto assets beyond just currency, spawning various tokens with varying purposes, such as utility tokens for using a particular service or security tokens for expressing a stake in a specific asset.
Then came the NFTs. These have added another dimension of diversity to the cryptocurrency ecosystem. NFTs are unique digital assets, such as works of digital art, collectables, and virtual real estate, which may be verified regarding ownership and origin thanks to the blockchain technology used to create NFTs.
The emergence of NFTs has added additional aspects to crypto asset management because of the unique nature of these assets.
Now that you have learned about the history and development of crypto assets, let’s move on to the various cases where you can use them in real-life scenarios.
Diverse Use Cases For Crypto Assets
Crypto assets are not just a speculative investment but a powerful tool for various use cases. You can use them to raise funds for your projects, streamline your processes, reduce your workloads, and cut your expenses. Here are some examples of how you can benefit from crypto assets:
Fundraising:
You can launch your token or coin and sell it to the public in exchange for other crypto assets or fiat currencies. This way, you can raise capital without giving up equity or control of your project. You can also use platforms like Kickstarter or Indiegogo, but you have more flexibility and transparency with crypto assets.
Streamlining Processes:
You can use smart contracts to automate and enforce the rules and conditions of your transactions, agreements, or contracts. Smart contracts are self-executing programs that run on a blockchain and can eliminate the need for intermediaries, paperwork, or human errors.
You can use them for escrow services, voting systems, supply chain management, and identity verification.
Reducing Workloads:
You can outsource some of your tasks or projects to a decentralised network of workers or contributors incentivised by crypto assets. For example, you can use platforms like Golem or iExec to rent computing power from other users or platforms like Steemit or Brave to reward content creators and consumers.
Cutting Expenses:
You can save money using crypto assets instead of traditional payment methods. Crypto assets have lower fees, faster transactions, and greater security than fiat currencies or credit cards. You can also avoid currency conversion fees, inflation, or volatility by using stablecoins such as Bitcoin, Ethereum, or Tether.
The Need For Crypto Asset Management
Today, the need for crypto management is becoming a mandate. People are becoming more involved in crypto as the world moves towards technological advancements. Hence, if you are a seasoned crypto trader or a newbie crypto investor, you can reap the benefits of crypto profits only with adequate asset management.
With the help of proper crypto asset management, you can diversify your crypto portfolio and minimise the risks.
You must understand that the crypto market is complex and volatile, and it can be difficult for you as an investor to keep up with the latest trends and developments, such as tokenisations and NFTs. Here are some of the reasons why you need crypto asset management.
Proliferation Of Tokenised Asset
Tokenisation converts an asset into a digital token that can be traded on a blockchain. These assets can represent underlying assets, such as real estate, private equity, and commodities. Expanding such assets has created several new opportunities for you and others.
For example, you can now invest in fractions of real estate or private equity funds, previously only accessible to wealthy individuals and institutions.
However, the proliferation of assets has also created new challenges for investors. These assets are often complex and illiquid, making them difficult to buy and sell.
Market Capitalisation Of Cryptocurrencies
Another reason that makes crypto wealth management important is the market capitalisation of cryptocurrencies. The total market capitalisation of cryptocurrencies has grown from a few million dollars in 2013 to over $1 trillion in 2023.
This growth has been driven by several factors, including increasing institutional adoption and developing new decentralised finance (DeFi) applications.
This growing market capitalisation has made them a more attractive asset class for investors. However, it has also made it more important for investors to manage their crypto assets carefully. Cryptocurrencies are volatile assets, and their prices can fluctuate wildly.
Popularity Of Non-Fungible Tokens (NFTs)
Due to their uniqueness, NFT sales have boomed in the past few years. As per a study, the NFT market generated over $24.7 billion in trading volume in 2022.
These NFTs have concocted new investment opportunities for individuals and traders alike. Hence, you must thoroughly understand the complications of NFTs, a complex asset class.
Goals Of Crypto Asset Management
Today, you can buy and sell crypto assets in seconds with an account on a crypto exchange and a wallet supported by the respective crypto asset. Due to its ease of access, a gap has risen to manage these assets in a single place.
Many firms recognised this gap, and crypto asset management was born. Crypto wealth management aims to help you achieve your financial goals by managing the crypto assets to maximise returns and minimise risk.
Rather than experiencing the complexity of managing various accounts and wallets across different exchanges, today’s crypto asset management is streamlining the process. The goal is to assist you in consolidating your diverse holdings while offering enhanced portfolio management, making the experience significantly easier.
Moreover, many asset management companies offer robo-advisors powered by artificial intelligence and machine learning algorithms. The advisors help you construct investment portfolios aligned with your objectives and provide tools for monitoring and managing an ever-expanding array of assets.
However, some of you may not like the modern-age algorithms and choose to manage your assets independently. Such software paves an easy and user-friendly path for viewing and managing crypto portfolios.
Benefits of Crypto Asset Management
Here are several benefits which you can enjoy from using crypto asset management.
Consolidation of Holdings
First of all, it allows you to consolidate your holdings across different platforms, wallets, and exchanges, reducing the complexity and risk of managing multiple accounts and passwords.
Enhanced Portfolio Management
Another benefit is that it enables you to apply various strategies and tools to optimise your portfolio allocation, diversification, rebalancing, and risk management according to your goals and risk appetite.
Performance Tracking and Metrics
Crypto wealth management provides clear and comprehensive insights into your portfolio performance, including returns, volatility, fees, taxes, and benchmarks, allowing you to evaluate your performance and make adjustments as needed.
Broader Investment Opportunities
It also opens up new opportunities to access a wide range of crypto assets, including tokens, stablecoins, DeFi protocols, NFTs, and more, expanding your crypto investment horizon and potential returns.
Portfolio Monitoring and Decision Making
Crypto asset management provides real-time information and alerts on market movements, price fluctuations, news, events, and trends. It enables you to monitor your portfolio and make informed decisions in a fast-paced and dynamic environment.
Managing Your Crypto Portfolio
If you are a crypto investor, you know how challenging it can be to keep track of your assets across different platforms and wallets. You may have multiple accounts on exchanges, decentralised apps, or hardware wallets, each with interface and security features. You may also trade or swap different tokens, affecting your tax obligations and risk exposure.
How can you manage your crypto portfolio effectively and efficiently?
One solution is to use a crypto portfolio tracker like KoinX. A crypto portfolio tracker is a software tool that connects to your accounts and wallets and aggregates your balances and transactions in one place.
You can see your asset’s total net worth, performance over time, allocation, and exposure to different markets and sectors. You can also monitor the prices and trends of various cryptocurrencies, get alerts and notifications, and access market news and analysis.
In the following section, let’s understand in depth how KoinX simplifies crypto asset management for you.
KoinX In Action
KoinX is a platform that helps you manage your crypto portfolio and calculate your taxes. With over 25,000 crypto assets, 180+ wallets and exchanges, and NFT support, it is one of the best crypto portfolio trackers available today. There are several features which you can enjoy when using KoinX:
Accurate Preview Of Your Investments
KoinX automatically syncs with your exchange accounts and wallets and shows you the real-time value of your holdings in your preferred currency. You can also view your portfolio breakdown by coin, exchange, or wallet and see the historical performance of your assets.
Auto-Classification Of Transactions
Moreover, KoinX automatically categorises your transactions into different types: buy, sell, swap, transfer, or airdrop. It enables you to keep track of your crypto activities and understand the impact of each transaction on your portfolio.
Revamped Warnings Filter
Moreover, KoinX automatically categorises your transactions into different types: buy, sell, swap, transfer, or airdrop. It enables you to keep track of your crypto activities and understand the impact of each transaction on your portfolio.
Spam Token Filters
KoinX helps you avoid spam tokens that may clutter your portfolio or pose security risks. You can hide or exclude these tokens from your portfolio and focus on the coins that matter to you.
So, if you are looking for a good crypto portfolio tracker, KoinX is the one for you.
Conclusion
Understanding crypto asset management and its importance is essential for investors and traders who want to succeed in the crypto market. It can help investors maximise their returns, minimise risk, and achieve financial goals.
Moreover, crypto portfolio trackers such as KoinX are essential in asset management. It offers a comprehensive portfolio view, including real-time price updates, performance tracking, and risk analysis. So join KoinX today and make more informed investment decisions.
