Current trends strongly indicate that digital assets could sidetrack other forms of tangible assets in the near future. Despite the massive popularity, managing digital assets is not as trivial as one would expect.
Business elites in our conventional world seem to have mastered the art of asset management, but investors in the digital world evidently struggle to reenact this.
These 5 digital asset management tips will set you on the path to preserving and maximizing returns on your digital assets.
1. Adopt a Secure Storage Means
The first step to managing your digital assets is to ensure that they are securely kept away from the prying eyes of hackers. In the first quarter of 2019, over $365 million in cryptocurrency was stolen from exchanges according to Ciphertrace, thus bringing total stolen crypto to the excess of $1 billion. These heists exposed the security flaws of hot wallets (wallets connected to the internet) and their high vulnerability to cyber-attacks.
Hardware wallets or cold wallets are the most secure means of storing cryptocurrencies since they are online for only as long as the user needs to access them. They are highly immune to hacks but prone to physical damage or misplacement. Safekeeping ensures that these are totally avoided.
2. Keep Track Of Your Assets
More often than not, our holdings are scattered across various wallets. This makes it very difficult to keep track of our assets.
Overcoming this difficulty exposes us to a host of benefits. Frequent asset tracking nullifies the chance of lost and forgotten assets, enables investors to maintain accountability and allows them to monitor market price movements.
Portfolio-managing applications such as Blockfolio, Delta and the likes have made life easier for investors. With these applications, we can easily track and monitor our holdings on a single interface.
3. Implement a Risk Mitigation Plan
Drastic times they say calls for drastic measures. For digital assets however, there is a slight variation. We must take drastic measures in anticipation of drastic times since they are inevitable in the volatile world of Bitcoin.
Mapping out an effective risk mitigation plan can help lessen the effect of bad trades and minimize the impact of an overall bearish market. These risk mitigation strategies employed by expert investors are worth considering.
4. Avoid Get-Rich-Quick Schemes and HYIPs
Rookie traders and investors often fall victims to HYIPs (High Yield Investment Programs). These programs run by rogue operators entice unsuspecting investors by promising ridiculously high return on investment only to abscond with funds.
More experienced investors know that no sustainable platform can assure a 50-100% return on investment after a specific timeframe. It is a red flag by no small measures. Avoid them at all costs!
5. Hire A Financial Advisor or Portfolio Manager
Due diligence must be made before investment decisions. Some investors have financial power but lack knowledge, expertise and experience to evaluate investment opportunities while others can only dedicate as much time as other facets of life permit.
Hiring a financial advisor or portfolio manager ensures that we don’t miss out on investment opportunities irrespective of our schedule or expertise level. It also helps us avoid the many pitfalls and investment mistakes people make. Moreover, outsourcing digital asset management makes your life a lot of easier!
Digital asset management conclusion
Creating and preserving digital wealth is largely a function of how well we manage our assets. If you can incorporate these well-tailored tips, you’re well on your way to achieving this.
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