For any cryptocurrency investor with a portfolio consisting of different assets, it is very important to be up to date with their valuations. This is where cryptocurrency portfolio trackers come into play. These are applications that allow crypto investors to track the total amount and value of cryptocurrencies across all wallets, blockchains, platforms, and exchanges in real-time. However, with so many cryptocurrency trackers on offer, the decision to select one can be tricky. Let’s take a deep dive into the selection process of an appropriate cryptocurrency tracker.
What is a cryptocurrency portfolio tracker?
A cryptocurrency portfolio tracker is usually a digital platform such as a website or app that enables visitors to keep track of the ever-changing value of cryptocurrencies. Cryptocurrency portfolio trackers can integrate with cryptocurrency wallets enabling users to control their digital currencies. Some of them can also integrate directly with actual cryptocurrency exchange accounts where investors can directly trade digital assets.
4 Features to look for in a cryptocurrency portfolio tracker
With so many tools on the market, there is enough confusion when it comes to selecting the best one. While all of them advertise promising features, there are certain factors you should look for in a cryptocurrency portfolio tracker.
- Level of security
Cryptocurrencies use blockchain technology where the network isn’t tracked, regulated, or owned by any specific institution or authority. This also means cryptocurrency ownership is hard to track and transactions are almost irreversible. Crypto portfolio trackers should be careful enough not to let any malicious actor go through them to get user login details for a variety of financial institutions.
Some of the signs that a cryptocurrency portfolio tracker takes its security seriously are if they encrypt manages and use two-factor authentication whenever applicable. For heightened security, some crypto portfolio tracker apps don’t even access their user’s account credentials themselves, instead letting trusted aggregator services handle such information.
- Integrating with financial institutions
Usually, cryptocurrency portfolio trackers connect with third-party aggregator APIs to access different crypto data feeds which they then funnel to their clients. However, the majority of aggregators are limited and work in certain countries and connect to certain crypto feeds. This is why it is necessary for cryptocurrency portfolio trackers to track different bank and credit card accounts, and investment accounts, in addition to different cryptocurrency accounts. This is only possible if the portfolio tracker works with different aggregators serving different markets.
- Level of automation
A good crypto portfolio tracker should provide a singular dashboard from where they can keep track of their investments. It should not be a time-consuming process and should enable investors to check the performance of their portfolio at a single glance. A good cryptocurrency portfolio tracker should never be difficult to use, allowing users to see their progress or add assets in just a few clicks. This is only possible when there is a certain level of automation present.
- Portfolio unification
To be a successful investor and maintain a healthy portfolio, diversification is a must. However, diversifying into alternative investments such as cryptocurrencies can make it tough to understand how all of them are impacting your portfolio. This is why it’s always good to look for crypto portfolio trackers that are more robust and support more asset classes besides cryptocurrencies. Some of the best portfolio trackers should also support your preferred currency.
- Automatic calculation of cryptocurrency taxes
Every cryptocurrency investor feels nervous when the tax season arrives, especially in countries where cryptocurrencies are directly taxed. As cryptocurrencies are a relatively new asset class, it can be difficult to determine which asset class falls under which category. Seasoned crypto investors should thus invest in a crypto portfolio tracker that meets all your tax reporting needs under one comprehensive platform. Many cryptocurrency portfolio trackers can generate crypto tax reports at a click of a button.
Conclusion
No two cryptocurrency investors are the same. A cryptocurrency portfolio tracker should always cater to the preferences of the trader using it. By looking at the factors above, you can easily select your preferred cryptocurrency portfolio tracker out of the myriad of options available in the market. Choosing the right one will allow you to invest properly and take smart investing decisions as your portfolio grows.
