Ben Sherman, during a recent congressional crypto hearing, went on a bit of a rant about the sector. And, as a result of this detour about cryptos devouring other cryptos, he unintentionally spawned four new tokens, one of which is the Mongoose Coin.
That currency went out 320,000 percent in just a few days, swiftly establishing new records. That strikes me as a powerful metaphor for the coming year, particularly in terms of crypto laws. What might begin as a legitimate attempt by Congress to legislate more protections for stablecoins could wind up triggering a chain reaction of pump and dumps and outlandish tales.
And it's possible that this will convert an already volatile market into a tax return merry-go-round. Now, some analysts are predicting that 2022 will be a gap year for the bull market, with huge cap coins pausing and dropping as markets consolidate.
Others, on the other hand, argue that we should all strap up because the show is just getting started and the coins are going to pump. But, as Mongoose Coin has demonstrated, no matter where the market goes, there will be big opportunities to profit. The challenge is to alter your strategy to discover such openings, as is always the case.
And this is because we only know one thing for certain: cryptocurrencies are in a period of transition. And it's critical to have a good crypto portfolio tracker in place ahead of time, one that fulfills your requirements.
Is It Necessary to Use a Portfolio Tracker?
Simply answer this question to determine whether or not you require a portfolio tracker. Would you rather be crypto investor Shane, who made roughly $60,000 in profit on crypto last year, or would you rather be $57,000 or $62,000?
He has no idea because he did it in a number of ways, including DeFi, yield farming, exchanges, and loans, but he never tracked it. As a result, he doesn't know what his cost basis is or how he'll ever file his taxes.
Or would you rather be crypto investor Peter, who understands precisely how he made $60,523 in crypto using the same methods? He knows how much he spent on gas fees for prospective tax deductions, and he has no extra work to do at tax time.
What exactly are crypto portfolio trackers?
These applications and websites track the pricing of your assets in real-time, so you don't have to keep precise records on a spreadsheet to watch your Whopper coin or whatever you invested in % grow.
We've spent the last several weeks researching the finest trackers and have begun ranking them based on their features. But then we decided to take it a step further and discuss them in terms of strategy.
This, we believe, is a superior method. As a result, we matched each of our top recommendations to the type of investor who would gain the most from each tracker.
1. Delta (Beginner Trader)
The long hodl strategy of investing is now preferred by the majority of new investors. Buying Bitcoin, Ethereum, Litecoin, or other large-cap assets and holding them for as long as possible is the goal. This is the simplest method for submitting your tax returns, and it requires the least amount of time to set up.
The most important factor to consider for this sort of investment is security. You want a portfolio tracker that ensures your assets are protected from hackers and provides you complete control over your currencies' private keys.
Personally, I put my confidence in custodial exchanges like Coinbase and Kucoin to keep my funds safe. They have insurance and emergency funds in place to compensate users if they are ever hacked. It's vital to keep in mind that they aren't required by law to repay you.
The Federal Deposit Insurance Corporation (FDIC), which insures your money in the bank, does not cover cryptocurrency. It's critical to keep that in mind. For buy-and-hold investors, using a hard noncustodial wallet like Ledger and connecting it to a portfolio tracker like Delta is the ideal option.
Now using this app, you can track the value of your crypto without having to move it out of your exchange or wallet app and you get a detailed look at your assets allocation across those linked accounts. This is a great solution if you're a buy-and-hold person without much DeFi action.
2. CoinStats (Average Trader)
If you're a more active trader, don't worry; I've got you covered. So maybe day trading, low cap coins, and speculative meme assets are part of your daily routine, and you've got some crypto in liquidity pools or lending protocols.
In this situation, CoinStats might be a good place to start. They have a few levels. The free version is very good if you don't have a crazy amount going on, maybe a couple of exchanges and wallets. Then there's the basic subscription plan from $3.49 a month, this allows you to connect up to ten exchanges, ten wallets, and keep track of 1000 transactions.
And then the top doc version, the premium package at $13.99 a month gives you up to 100,000 transactions, unlimited exchanges, and wallets, and a personal account manager, CoinStats, like Delta, allows you to see an allocation pie of all of your current holdings and organize your portfolio based on your various altcoin strategy.
They also allow you to add manual entries if you have an unusual transaction for whatever reason.
3. Kubera (Diverse Trader)
Now, we need to zoom out a bit and remember that the world doesn't revolve around crypto, at least just yet. There are other assets that need tracking as well. Let's say you're an investor who is very diversified across many markets, and you need to be able to track several bank accounts, mortgages stocks, real estate, and your crypto and how all of this relates to your overall net worth.
We're going to call this the International Man of Mystery Investor. You want a portfolio tracker with as broad coverage as possible, so you don't forget about that pesky Villa in Spain that you bought last year. Kubera is a web app that supports over 20,000 different banks worldwide, and it aims to be the one-stop-shop financial tracker.
And what we like about this app is the ability to import your data and from there, get real-time price updates all in one comprehensive view. Changes you make to your real estate, investment, or car loans are all reflected in your net worth without having to prompt the app to update those figures.
And if you've ever tried manually tracking your assets, you'll enjoy how much the UI resembles an Excel spreadsheet without the hassle of having to manually enter your own equations. Kubera now costs $15 per month, or $150 if you sign up for the entire year. Although there is no mobile app, you may use your phone's browser to access the service.
4. Coin Market Manager (Frequent Trader)
Now, a few years ago, the crypto research firm HackerNoon published a study that looked at how well a crypto portfolio would do if rebalanced monthly, weekly, daily, and hourly. The procedure entailed investing $5,000 in several portfolio pairings at the start of a one-year period.
The findings were particularly fascinating, as one portfolio in each pair followed the Hodl approach while the other used one of the timebound rebalancing strategies. They discovered that a one-day rebalancing technique would give the greatest improvement over a hodl-only approach across the board.
This was the golden spot when trading fees were restricted at 0.25 percent and didn't eat up too much of your profits.
Of course, depending on the market, each year's findings might be somewhat different, but studies like these encourage many investors to allocate low and high-risk cryptos within their portfolios and then purchase and sell on a regular basis to keep that balance in check.
So, if you invest 50% in Bitcoin and Ethereum, 25% in ADA and Solana, and 25% in riskier meme shots like Shiba or the Squid game Token, you'd have to purchase and sell on a daily basis to maintain that balance in check, hoping to maximize your upside under this strategy.
This implies that your crypto portfolio tracker must be able to handle your high trading volume, and you'll want long-term performance data as well as notifications whenever there's a sudden change in the trends. For this purpose, Coin Market Manager is an ideal choice.
You can link your notes into your CMM account if you're conducting a lot of your own research. They then provide you with insights based on your notes and trade history, allowing you to identify trends more clearly and determine what worked and what didn't. The biggest feature that sets this app distinct from the rest is journaling.
Now the downside here is the cost. It has a 14-day free trial before you're asked to upgrade to a professional plan which sets you back $500 annually.
However, we did a little bit of digging and found a little bit of a life hack, a plan called CMM Unlocked where you can get free access to all pro features by just linking an exchange account from either FTX, Binance, Deribit, or Bybit and then that wipes out the fees.
Now many other wallets and exchanges are still supported on CMM, but if you want to bypass that high paywall, you'll have to get an account with one of those four exchanges and you won't have such a hefty fee.
Why Is This So Important?
The point is that cryptocurrencies are here to stay. Investing in a crypto portfolio tracker is a great way to gain insight into your trading history, become a better investor, and, most importantly, save a tonne of time come tax season.
The last thing you want to do at the end of the year is comb through 10,000 transactions before Uncle Sam smacks you for not keeping track of everything. So, for your investing plan, use the greatest portfolio tracker.
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