What is a Crypto Portfolio Manager? (2024)

The crypto boom extends well beyond Bitcoin. Investors can select from over 10,000 cryptocurrencies. Some of these crypto assets have significant potential. For example, Dogecoin and Shiba Inu went from unknown to superstar coins in a matter of months. These coins produced life-changing returns for people who got in early.

Most people missed out on these surging cryptocurrencies. Some investors don’t know how to spot promising cryptos, and others don’t know how to assess a cryptocurrency. The rules for crypto are different for stocks and real estate, but a crypto portfolio manager can help. These managers have the expertise to spot great opportunities and provide you with a return on your investment. We’ll discuss the role of a crypto manager and reasons to consider a portfolio management tool.

What is a Crypto Portfolio Manager and How Does It Work?

A crypto portfolio manager trades crypto on your behalf. Investors provide managers with funds, and they allocate funds across promising cryptocurrencies. It operates under a stated objective. Some of them promote a lower-risk strategy that focuses on established cryptocurrencies such as Bitcoin and Ethereum, while others cater to high-risk, high-reward individuals. These managers may focus on altcoins with small market caps that can fade or become rising stars. You can select a crypto portfolio manager with objectives that align with your risk tolerance.

How Can You Track Your Crypto Portfolio Manager?

Investors can look at a crypto portfolio manager’s historical returns. This data helps investors gauge a portfolio manager’s past performance before investing with them. You should compare a crypto portfolio manager’s performance to a crypto ETF or fund related to their holdings.

You can check the performance of any platform like you would with any stock or crypto holding. You can visit your portfolio at any time and keep track of your profits. In addition, they can analyze performance over several timeframes, such as the previous month, year-to-date returns, and lifetime returns.

Crypto portfolio managers differ from passive investing. A passive portfolio doesn’t have much activity. You put money into funds and hope assets move in your favor. Someone isn’t handling the funds for you in a passive account. Investors can automatically invest in passive portfolios and not think much about them.

An active portfolio requires more work but can produce higher returns. Full-time active users can trade crypto to mitigate risks and respond to price changes in real-time. Cryptocurrency investors can receive support with trading instead of doing it themselves. Managers take the active work off your shoulders. They manage your portfolio activity to balance risk and returns. Crypto portfolio managers won’t manage your entire portfolio. They will only manage the funds you give them. You can buy individual stocks, mutual funds, and crypto without worrying about a crypto portfolio manager touching those holdings.

Is A Crypto Portfolio Manager Right For You?

Crypto portfolio managers can enhance your returns and give you exposure to promising cryptocurrencies. The best crypto portfolio tracker can simplify investing for many people, but a manager is not suitable for everyone. A popular one can find under the radar cryptocurrencies, follow the crypto markets every day, and keep track of current events. If you can do those things yourself, you may not need a crypto portfolio manager.

Crypto portfolio managers make the decisions for you, helping you avoid emotional investing. Although investors should focus on logic, many get driven by their emotions. You may buy a high rising crypto because you fear missing out. Similarly, you may sell a crypto on the decline because you don’t want to incur additional losses. A crypto portfolio manager can stay focused on the long-term and isn’t as prone to emotional investing. A cryptocurrency portfolio tracker focused on trading on cryptocurrency exchanges can make movements based on technical analysis instead of emotions.

The Advantages Of Using A Crypto Portfolio Manager

Many crypto investors seek portfolio managers to simplify their investing. We have covered some of the advantages of using a crypto portfolio manager.

• Get your time back: You don’t have to look at the crypto markets. Someone else will make investment decisions and pay attention to the news. You can spend more time with loved ones and grow your career. Boosting your income is one of the best ways to grow your portfolio. A higher-income increases your monthly contribution. Crypto portfolio managers allow you to spend more time on what matters.
• Exposure to crypto investment opportunities: The crypto world stretches far beyond Bitcoin and Ethereum. Promising altcoins can suddenly shoot up in valuation and generate life-changing returns for early adopters. Crypto portfolio managers monitor various altcoins and know what to look for in a promising asset (i.e., market cap, volatility, etc.). Exposure to different coins will diversify your portfolio, minimizing your crypto risk.
• Crypto storage gets done for you: We’ve all heard at least one horror story of someone getting locked out of their crypto fortunes. Whether the unfortunate investor forgot their password or lost their travel drive, these nightmarish stories can scare people away from digital assets like crypto. Even those these stories rarely happen, the risk exists. Crypto portfolio managers handle storage and have protection measures in place to keep your funds safe from hackers.
• Portfolio personalization: Crypto portfolio managers operate several accounts. Some are high risk and high reward, while other accounts take the opposite route. Many investors find an actively managed fund that caters to their risk tolerance and objectives. This level of personalization can make you feel more confident about the person managing your funds.
• Get help from professionals: Crypto portfolio managers have experience with managing money and navigating the crypto market. They’ve seen the ups and downs and invested under various circ*mstances. Managers can lean into their knowledge of historical events and how economic indicators impact crypto valuations. You don’t have to learn about the efficient market hypothesis or other investing concepts. You can get help from professionals who apply these strategies for a living.
• Better risk management: Crypto portfolio managers mitigate risk and spread funds across several crypto holdings. Some investors build heavily concentrated positions around their top holdings and pay for it during a correction. Others continue pouring money into cryptos without assessing risks. When you buy any crypto, you incur risk. Portfolio managers review your portfolio’s risks and potential rewards. They use strategic portfolio allocation to manage risks while improving returns.
• Reduce emotional investing: Crypto portfolio managers focus on the long-term viability of their assets. They don’t get as deterred about short-term volatility because they’ve experienced it several times. A beginner can get overwhelmed by dramatic crypto movements and sell out of positions too early. Some investors go into FOMO mode, buy at the high market prices, and sell after their crypto has taken a dive. Crypto portfolio managers know to avoid those mistakes. They can take emotions out of investing and focus on the numbers and opportunities.