Add Crypto to Your Portfolio

Crypto assets have emerged as a new “digital gold” and a blockchain ecosystem powering innovation and decentralization in finance and beyond.

There are multiple ways to get crypto exposure in your portfolio:

• Crypto Exchange: open an account on a crypto exchange like Kraken or Coinbase. Most crypto exchanges also act as brokers and custodians holding clients’ funds on their balance sheets. As a result, investors are exposed to the counterparty risk. Therefore, it’s advisable to not hold material amounts of crypto directly on a crypto exchange
• Non-Custodial Wallet: digital wallet accounts are a safer place to store material crypto exposures as they have no access to clients’ funds but provide direct access to respective blockchains. Most wallets allow crypto transfers while some allow crypto purchases as well. Typically, these wallets require users to create private access keys that are stored on users’ devices (or on an offline hardware device). In case of device loss, access to crypto holdings might only be restored via saved recovery phrases
• Crypto ETF: this is the easiest way for private investors to get some crypto exposure as the asset class is becoming more and more available after SEC approval. However, so far only Bitcoin is available through ETFs with ETH likely coming soon as well. Crypto transfers, payments, and staking would not be available as well
• Crypto Futures: buying crypto futures on a stock exchange via a regular broker is another way to add exposure. Like all futures, they need to be rolled at expiration resulting in a rollover risk as the price to re-establish a position might be higher than proceeds at the contract maturity

8FIGURES supports connectivity with all crypto wallets and chains allowing automatic tracking of your crypto portfolio. Manual adding of crypto holdings is available as well.

Similar to other asset classes, crypto holdings deserve to be tracked with a professional return calculation (P&L, MOIC, IRR).

The debate continues on whether crypto is merely hype or a legitimate asset with high upside potential. Regardless of your stance, gaining some crypto exposure in your portfolio and experiencing crypto payments could be worth a try.