Crypto Asset Management: Definition, How It Works, and Goals

What Is Crypto Asset Management?

Crypto asset management is the practice of purchasing and selling digital assets to be used as investments while managing a portfolio to experience an overall growth in value. Asset management is not a new practice, but managing a crypto asset portfolio—or portion of a portfolio—has only become a necessity since cryptocurrency and other blockchain-linked digital assets drew the attention of investors.

Key Takeaways

• Crypto asset management is buying and selling crypto assets to maintain your portfolio and allocate your assets per your strategy.
• If you choose to invest in crypto assets, you might find it easier to use crypto asset management tools and apps to keep track of them all.
• Crypto asset management platforms and tools help you take advantage of your assets without worrying about the technical details.

Understanding Crypto Asset Management

Bitcoin debuted in 2009; initially, there was very little interest from investors—until they realized the potential for gains following rising Bitcoin prices. Ethereum’s emergence in 2013 gave the world another jolt by introducing a blockchain that was programmable and versatile. Eventually, people found ways to use blockchain to secure ownership of digital items, which gave those assets value.

Cryptocurrencies are only one of the many types of crypto assets; as time goes by, more emerge. Use cases are only limited by the imagination; nearly every industry is researching ways to use blockchain and crypto assets to raise funds, streamline processes, reduce workloads, and cut expenses.

The rapid creation of tokenized tangible and intangible assets brought with it a need for tools to manage them as part of a portfolio. These tools can assist you in your crypto asset management endeavors.

Note

Your favorite athlete, musician, or actor may be tokenized in the future and become part of your crypto asset portfolio.

For the entities behind these platforms, the incentive is clear: where there is an opportunity, there will be a company leveraging it to make money. The market capitalization of cryptocurrencies exceeded $1.7 trillion in January 2022 and grew to more than $2.22 trillion by August 2024.

Goals of Crypto Asset Management

Cryptocurrencies and other assets are easier to buy and sell than in the past. You only need to create an account on the exchange of your choice and choose a wallet that it supports to buy or sell crypto assets.

The ease in which you can access crypto assets means that it is essential to have a way to manage them, similar to the way you’d manage traditional investments in a portfolio. Many people and companies have recognized this need and created tools and apps that are now commonplace in more traditional financial markets—asset management apps and services.

Instead of managing multiple accounts and wallets from different exchanges while juggling traditional assets, crypto asset management platforms are simplifying the process by helping users consolidate their diverse holdings while simultaneously providing improved portfolio management tools.

Many of these applications use robo-advisors, which are artificial intelligence and machine learning-enabled (AI/ML) programs that can help you create your investment portfolios based on your goals; they also help you track and manage a growing number of assets. You can view your holdings’ performance through charts and metrics, and the robo-advisor can help you identify opportunities to exchange assets for others that are performing better.

Note

Any tangible or intangible asset can be tokenized through a blockchain. For example, shares of a company, fine art, jewelry, intellectual property, and even real estate can become crypto assets offered to investors through tokens.

Even with AI/ML, many traders and investors prefer to manage their own investments. These new asset management platforms allow you to do this as well. These tools offer an easier pathway to entry and success for everyday traders who don’t have a deep and thorough understanding of the crypto asset sector.

How Is Crypto Asset Management Different?

Crypto asset management is different from asset management only because it includes tokenized assets—any asset that has had value transferred to a blockchain. The platforms and apps give you more investing options and let you gain exposure to both traditional and emerging investment opportunities.

You’re able to view your entire investing portfolio with crypto asset management apps, which keeps you better informed and able to make investing and trading decisions based on real-time information across all of your investments.

What Does Managing Your Crypto Assets Actually Mean?

Crypto asset management is the practice of tracking, buying, and selling assets that are tokenized on a blockchain to ensure you’re getting the best portfolio performance possible.

Can You Hire Someone to Manage Your Crypto?

Yes. Many asset managers can manage your cryptocurrency for you. When choosing one, make sure that they truly understand the crypto market and the role it should play in your portfolio. Crypto is very volatile, and the wrong allocation could wipe out your portfolio in a matter of days.

How to Become a Crypto Asset Manager?

If you’d like to become a crypto asset manager, you’ll need a degree in finance, economics, or business and experience as a financial analyst or asset manager (along with all the required certifications). Next, you’ll need to become an expert in the cryptocurrency market and gain experience with cryptocurrencies. It’s possible that additional certifications will also be required for those aspiring to manage crypto assets for clients.

The Bottom Line

Crypto asset management involves buying and selling crypto assets to match an investing portfolio strategy. It has become popular for investors who can tolerate the volatility and risks involved in crypto asset investing. Several companies have created crypto asset management platforms and tools to help crypto investors manage these assets.

Read the original article on Investopedia.