Investors are increasingly looking to add crypto assets such as Bitcoin, non-tradable tokens and other digital offerings to diversify their portfolios and capture some of the potential advantages of this new asset class. So, what is crypto asset management?
What is Crypto Asset Management?
Crypto asset management is the practice of buying and selling digital assets to be used as investments while managing a portfolio to experience overall growth in value. Asset management is not a new practice, but managing a portfolio of crypto assets or part of a portfolio has only become a necessity since cryptocurrency and other blockchain-linked digital assets have caught the attention of investors.
Understanding Crypto Asset Management
Bitcoin made its debut in 2009; Initially, there was little interest from investors until they realized there could be potential for gains following rising Bitcoin prices. The introduction of Ethereum in 2013 gave the world another jolt by introducing a programmable and versatile blockchain. Eventually, people found ways to use blockchain to secure ownership of the digital items that value these assets.
Cryptocurrencies are just one type of crypto asset; more and more as time goes on. Use cases are limited only by imagination; Almost every industry is exploring ways to use blockchain and crypto assets to raise funds, streamline processes, reduce workloads and reduce costs.
The rapid creation of tokenized tangible and intangible assets has led to the need for tools to manage them as part of a portfolio. While there was a clear need, tools have emerged to assist you in your crypto asset management efforts.
Your favorite athlete, musician or actor may be mentioned in the future and become part of your crypto asset portfolio.
The incentive for the organizations behind these platforms is also clear: when there is an opportunity, there will be a company using it to make money. The market cap of cryptocurrencies exceeded $1.7 trillion in January 2022 and continues to grow. In addition, other assets also create opportunities. In 2021, non-unique tokens became popular. By January 2022, the market capitalization of the asset class exceeded $23 billion.
Goals of Crypto Asset Management
Buying and selling cryptocurrencies and other assets is easier than in the past. You just need to create an account with the exchange of your choice and choose a supported wallet to buy or sell crypto assets.
The ease of accessing crypto assets means there must be a way to manage them, similar to how you manage traditional investments in a portfolio. Many individuals and companies recognized this need and created tools and applications common in more traditional financial markets, such as wealth management applications and services.
Crypto asset management platforms simplify the process by providing advanced portfolio management tools while helping users consolidate their various assets, instead of managing multiple accounts and wallets from different exchanges when dealing with traditional assets.
Most of these apps use robo-advisors, which are artificial intelligence and machine learning enabled (AI/ML) programs that can help you build your investment portfolios based on your goals; they also help you track and manage an increasing number of assets. You can view the performance of your assets through charts and metrics, and the robo-advisor can help you identify opportunities to trade assets with others that perform better.
Any tangible or intangible asset can be tokenized via a blockchain. For example, shares of a company, fine art, jewellery, intellectual property, and even real estate can become crypto assets, with shares offered to investors via tokens.
Even with AI/ML, many traders and investors prefer to manage their own investments. These new asset management platforms enable you to do just that. These tools offer an easier path to entry and success for day traders who do not have a deep and comprehensive understanding of the crypto-asset industry.
How Is Crypto Asset Management Different?
Crypto asset management differs from asset management in that it includes tokenized assets any asset with value transferred to a blockchain. Platforms and apps give you more investment options and enable you to take advantage of both traditional and emerging investment opportunities.
You can view your entire investment portfolio with crypto asset management apps that better inform you and make investment and trading decisions based on real-time information on all your investments.
What Does Managing Your Crypto Assets Actually Mean?
Crypto asset management is the practice of tracking, buying and selling tokenized assets via a blockchain to ensure you get the best portfolio performance possible.
How Do I Manage My Crypto Portfolio?
You can control each asset in your portfolio separately; However, crypto assets can come from many different places, so managing them can be quite difficult. It’s easiest to use a crypto asset management app that lets you monitor your traditional investments at the same time.
What is a Crypto Asset?
A crypto asset is a tokenized cryptocurrency or asset, which is the transfer of the value of an object to a blockchain. Tokens can be split for a wider distribution of ownership, like dividing ownership of an asset into shares, but these shares are digital.
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