With more people entering the crypto space, it becomes crowded with lots of different coins. With thousands being available, it is hard to see which coins have potential. Especially with pump and dump schemes from smaller coins, which are often pushed by a few whales (i.e., users with vast amounts of crypto). If you are interested in investing in crypto, it makes sense to have a healthy portfolio. Although the market is different from traditional investing, there are still takeaways that you can learn from. Having a cryptocurrency tracker is one such takeaway, as it enables you to grow your wealth while having the ability to continuously monitor.Â
Where to start when investing in crypto
If you decided to invest in or started investing in cryptocurrencies, you have a certain risk appetite by definition. However, there are some levels of risk we could address. For example, we could argue that established coins such as Bitcoin and Ethereum have a lower risk than newer coins with a smaller market capitalization. You can start creating clusters of coins you are interested in and group them by perceived risk.
Clustering in a cryptocurrency tracker
You are also able to create clusters in a tracker. For example, Delta is offering the possibility to create ‘portfolios’, where you can add certain holdings. By clustering them, you do not only group them by risk, but you can also see their respective returns. This helps, as you can expect riskier investments to have a higher return. If not, it is better to get rid of them.
Growing your crypto wealth
Crypto assets have different behavior from traditional stocks. For example, you do not get paid dividends by an operating company. Instead, you participate in the consensus mechanisms (e.g., Proof of Stake). With your help in validating the transactions, you can receive compensation for additional coins. When you use a tracker such as Delta, you can continue to participate in consensus and grow your stake in the network. This is helpful, as this in many cases is not possible.
Keep your holdings off exchanges
For example, when you are using an exchange, the coins are not in your possession. Instead, it is allocated to the exchange that maintains a system (e.g., using a database) to allocate the coins to you. This also means that they receive the compensation in case of a Proof of Stake mechanism.
Holdings in wallets
Therefore, it is recommended to keep your holdings in dedicated wallets. Some wallets support multiple coins, while others focus on solely one coin. When it comes to Delta’s crypto tracker, you can connect to the wallets using your Public Key. This means that no personal or private information is shared. The tracker simply looks up the transactions on a blockchain-related to the key and determines the value of the holdings. Hereby you have a safety mechanism to have a complete overview of your holdings. You are also safe from potential hacks of exchanges, which could result in your funds being lost. This has happened many times before, such as with the Japanese Mt. Gox exchange.
