Crypto Asset Management - What Investors Should Know in 2023

January 27, 2023
5 min

The basic principle of resource efficiency and prioritizing assets is neither new nor revolutionary. Spending time and money to protect and deploy assets is a long-term idea essential to a company’s future success. 

From our early days as nomadic tribes who live off the land, asset management was used to analyze crop rotations, ideal planting areas, and allocate resources like water, fertilizer, etc. 

Today, the role of asset management has expanded to all walks of life, though its practicalities are most evident in the world of finance. More specifically, we wanted to cover its applications in the crypto market and why crypto asset. management is absolutely key to thriving in this day and age.

What is Crypto Asset Management

In the world of finance, asset management is the process of meticulously studying, organizing, and rearranging your finances to maximize their value and utility.

It involves overseeing transactions, balancing financials, and analyzing trends and patterns. This practice is done to increase expected returns without increasing risk (i.e. maximizing the upside while minimizing the downside).

Of course, it’s easier said than done. 

Specifically, with cryptocurrency, asset management is the exercise of managing blockchain-based digital assets to maximize return.

In a world where use cases are limited purely by imagination, crypto asset management aims to make investments easier while capitalizing on the windfalls of new-found opportunities. 

Robo-advisors, for example, not only analyze and find existing patterns and trends but these AI programs could actually manage and trade your funds for you – so you don’t have to constantly monitor and fret over your money. 

Crypto Assets: 10 Years Growing in Complexity and Diversity

Crypto Market Cap 2013-2023
Crypto Market Cap 2013-2023. Source: CoinMarketCap

While cryptocurrency remains a relatively new sector of the financial world, it’s market has grown exponentially. Over the past 10 years, crypto market capitalization has grown from obscurity and nothing to a peak of over 2.6 trillion USD in early 2021. The 10-year course has been earmarked by Ethereum’s historic 9,500% gain in 2017 and Solana’s 4,730% tear in 2021 following NFT hype and demand.

And, of course, we have Bitcoin - which, since 2016, has grown by over 3,000%, from $500 to today’s $23,000.

In the beginning, there was only Bitcoin – worth less than a dime. It didn’t have a large market, exchanges were far and in-between, and most enthusiasts opted to hold on to their Bitcoin. 

Today, the crypto industry has split out diverse products and asset classes, both real and perceived, that has resulted in the need to closely monitor individual assets amidst dynamic market conditions. 

Did you know there are 7 different crypto asset classes? Find out more on How to Diversify your Crypto Portfolio.

From NFTs and utility tokens to ICOs and new blockchain products, navigating it all in 2023 will be a complex operation.

Challenges of Crypto Asset Management

Efficiently monitoring the market is a tricky endeavor, even for the most resilient individuals. It’s not uncommon for an asset to lose the majority of it’s value in weeks, days, or even hours. 

It only took 72 hours for Terra’s UST and LUNA to lose nearly $45 billion in value. Early on in 2021, Bitcoin’s price fell $3,000 in under two hours.

Crypto asset management is a task best left to a qualified team. Here’s why:

1. Volatility

The crypto market is extremely volatile.

Hours and minutes can have a huge impact on asset prices. When DAOs release announcements that shift investor sentiment, the market immediately responds.

We are diving into a market that many would consider speculative; an industry with minimal proven real-world use cases but all the potential in the world. The ability to monitor, stay up-to-date, and prepare to enter or exit a position at anytime is thus crucial for any profitable investor.

2. Uncertainty

The blockchain is a young, unproven industry with an unregulated ecosystem fraught with scams, scandals, and nefarious parties. While you should always be ready to jump into a position when the opportunity presents itself, you should also understand the dangers of the overall environment.

As governments further implement regulations, asset management programs become necessary to fend off outside threats and account for any unexpected market actions.

3. Digital Money Never Sleeps

Crypto markets are open 24/7, 365 days per year, and even on February 29.

No matter how enthusiastic or obsessive you are, no one can monitor the markets all year round.

For many asset managers, plug-and-play solutions have been the saving grace for operation optimization. Firms dealing in Crypto Asset Management need a robust asset selection criteria, flexibility, and efficient horizontal decision-making, all while presenting their returns in an efficient data streaming platform that rationalizes current trends.

Crypto Asset Management Tools

Partnerships, tools, and specific software have been the asset manager’s sword and shield. As more data and information is funneled into the market, a streamlined set of facilities and tools to process these analytics will define a successful asset manager.

The analytics graph the supply and demand of securities, provide insight into the market’s psychology, and serve as a basis for all traders to generate buy or sell signals.

These tools include:

A. Charting Tools

Charting tools allow one to visualize different trading indicators and predict future market trends. Charting tools are vital to any trader’s toolkit. Some traders even swear that technical analysis is all you need to profit on the market. 

B. Exchanges

Exchanges are almost every investors’ gateways to the crypto world. They allow users to buy, sell, and store cryptocurrency. Liquidity, security, regulatory bodies, and fees are all considerations that traders should take.

C. News Streams/Network Statistics

The third asset management tool that every manager will need is a reliable news stream with real-time, accurate information. Getting an accurate pulse on market sentiment is a mandatory requisite for any profitable investor or trader. A robust API for pulling your own data is a great bonus that more serious traders also take into account.

D. Calendar Events

On top of a reliable news stream, you should also have a calendar tool that shows upcoming events for different coins, DAOs, and projects. Events like hard forks, swap, or airdrop could all drastically impact price.

Peccala: First Automated Crypto Asset Manager

The last (but definitely not least) asset management tool you should consider is Peccala trading tech.

If not using Peccala, there isn’t a way for a retail investor to access a crypto asset manager today.

Much like traditional finance, only HNWI can access the type of technology we’re offering, either by directly investing in a hedge fund or through their asset manager.

Once the technology was created, we felt it was important to make it available to as wide an audience as possible, in line with Bitcoin's founding purpose.

How our automated crypto asset management works?

Our proprietary trading algorithms actively manage crypto assets, generating profits in any market situation.

We achieve this by investing in crypto futures which, for any new (or seasoned) crypto trader, are particularly risky, but we've built risk management into our trading models.

In 2022, our investments strategies generated $975k in profits for our users.

The future is not waiting for you!

Sign up today to automate your crypto asset management.