The crypto sector has come a long way from the early days of Bitcoin, when holding digital assets mainly came down to keeping a single wallet key and checking prices every once in a while. The ecosystem has expanded into dozens of cryptocurrencies, exchanges, networks, storage solutions, and so on, which naturally led to the diversification of the tools investors can make use of today to stay on top of their investments without getting overwhelmed. What started as a simple search into how to buy cryptocurrency has evolved into a complex space where managing coins and positions requires a proper tech stack of tools.
Many of those who are just starting out consider the choice of crypto they make to be the most difficult part. And they soon come to learn that managing, tracking, securing, and reporting on their holdings is where the work actually begins.
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Portfolio trackers that bring everything into one place
Say you plan to own more than a couple of coins. How will you keep track of them without the process turning into a headache? If they’re spread across more than one exchange and wallet, the whole back-and-forth between apps can become even more tiring. But the whole routine becomes easier when you discover portfolio trackers for crypto, a tool that centralizes all the data associated with your holdings in a single dashboard and allows you to see how each asset performs over time, how their values change, and how the overall portfolio evolves. Many portfolio trackers are designed to monitor assets held both on decentralized protocols and centralized exchanges alike, the latter of which you can usually link in a few minutes. Most trackers connect to exchanges through read-only access or simply read public wallet addresses, so they don’t need permission to move your funds. This makes them a low-risk tool that gives you a clear picture of where you stand, and it also helps you see when one coin has grown to take up a much larger share of your portfolio than you initially planned. When this shift happens, you know it’s time you rotate your capital and readjust positions. Such a tool is just as helpful in helping you know when it’s time to tweak your investment strategy by sending you updates on how the market fluctuates.
If your investments go beyond crypto and include traditional assets like index funds that track the S&P 500, you can find a tracker that lets you track and compare your performance against assets from other markets, too – a perk that’ll give you a better overview of your portfolio. This will help you figure out how you should diversify going forward.
Price alerts, so you don’t have to stare at charts
Checking prices every few minutes is one of the most common habits among crypto investors, and we’re not talking only about day traders, whose bread and butter is to keep a close eye on prices. We’re talking about your average investor, who checks prices on a regular basis and wants to know how their money is doing, as anyone would when they have something invested. Now, opening apps and constantly refreshing exchange dashboards to see how your investments are doing can be an exhausting habit, one that you can cut back on with price alerts. Price alerts can be easily activated either on exchanges that offer this feature or on price tracking apps, and push notifications to you when a price gets to a level targeted by you, whether you set a price for selling or for a dip you want to buy. Beyond convenience, alerts can also help you make calmer decisions. When you decide on your price levels in advance, you’re less likely to react impulsively to a sudden swing or a dramatic headline.
Tax tools to keep your records in order
In many countries, selling or swapping crypto can count as a taxable activity by tax authorities, especially if transactions are frequent and complex. More and more countries are stepping up scrutiny of crypto-related activities, and as oversight tightens, the accuracy with which you declare your crypto transactions and any resulting gains is increasingly important. Reporting your activity and profits incorrectly can lead to penalties or additional tax liabilities, which differ from country to country, and you should get the hang of them before you invest. To keep everything under control, there are tax tools that pull data from the trading history of the wallets and exchanges you use and calculate gains and losses automatically. Many of these tools generate reports that you and your account can use when it’s time to file. You don’t need to be a high-volume trader to consider using such a tool. If you need to deal with taxes, this is one of the least stressful methods to do so. For more sophisticated endeavors, high-volume investors use tax software, which can send reports directly to their accountants. But this is the homework of busier traders.
Research and charting tools for a closer look
If you’re going to make a more sizable investment than some spare money you’re fine with spending as an experiment, you probably want to look beyond the price. Research and charting tools help you do so by opening you up to what’s actually happening behind the price.
Charting platforms enable you to study price history and add simple indicators, like money averages, to spot longer-term trends. Coin screeners help you filter thousands of altcoins, which are any cryptocurrencies other than Bitcoin, by size or trading volumes, so you can narrow down your options on the fly. These tools come with a learning curve, but even their basic charts can give useful context to anyone who wants to understand the market better.
You don’t need every tool from the very beginning. You can start with the ones you deem the most helpful and expand your tool stack as you go to avoid the decision fatigue that too many apps can trigger when you’re yet to get fully comfortable with the market.