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Digital currency portfolio management (Portfolio Management) is a process in which your digital currency portfolio is managed by an expert person or people. In fact, the digital currency portfolio is an indirect method of investing in digital currencies, which is suitable for people who do not have enough time and expertise to invest directly. By paying the digital currency portfolio management fee, these people give their capital management to portfolio management companies or people who claim expertise in portfolio management. In case of issuing permission to the digital currency portfolio management service and forex portfolio management companies, you must check the digital currency portfolio management license of these companies and proceed to close the digital currency portfolio management contract sample so that you do not suffer from the disadvantages of portfolio management.
In expressing the disadvantages of portfolio management, I suggest that investors and activists in the cryptocurrency market should refrain from trusting the claimants. I also advise young friends not to accept capital from other people. Investors should not trust the claims of some people to increase their capital by entering the market and refrain from giving their capital to these people. Considering the high risk of the capital market and the existence of many fraudsters in this field, one should be very careful and knowledgeable when entering this market.
What is digital currency portfolio management?
At the beginning of the decision to invest in digital currencies, many people come across terms such as digital currency portfolio management service and portfolio management job. Digital currency portfolio management is a type of capital management service in which a person claiming to have experience and expertise takes over the responsibility of managing an investor’s digital currency portfolio. Using their experience and knowledge, this person or forex portfolio management companies try to increase the profitability of the investment portfolio by making appropriate transactions.
Digital currency portfolio management can be a good option for investors who don’t have enough experience and knowledge to enter the cryptocurrency market and want to make continuous profits from their capital. The portfolio manager or forex portfolio management companies form a digital currency portfolio according to the goals and risk tolerance of the investor by carefully examining the market and identifying currencies with investment potential. But due to the prevalence of fraud with digital currency trading, I forbid people from doing this. Because many people claim that managing your digital currency portfolio will cause you to lose your capital.
What is a digital currency portfolio?
Digital currency investment portfolio is a collection of digital assets available to traders and investors. The best digital currency portfolio has a variety of assets such as prominent market currencies, Shetcoins, Tokens. In fact, one of the important principles in portfolio management is to diversify it to reduce investment risk. The purpose of creating a digital currency portfolio is to minimize the effect of market fluctuations; Because every asset reacts to market events in some way. Investing in digital currencies begins with the purchase of top currencies such as Bitcoin and Ethereum. But over time, some investors look for currencies with high trading volume or Shetcoins that had a relatively high growth.
What is important in creating a digital currency portfolio is creating a portfolio with lower investment risk. Some people decide to entrust the management of their digital currency portfolio to an expert person or people in order to experience high profits without the knowledge and experience of these people. But considering the disadvantages of basket management, it is better not to do this.
Types of capital management
To get high returns from the digital currency portfolio management service, it is better to be familiar with the types of capital management so that you can choose the right capital management strategy. In the following, we will discuss the types of capital management:
Active capital management
The performance of investors in the type of active capital management is such that a group of managers actively monitor all types of investments and the factors affecting them. Basically, in the active portfolio, he selects a person as a portfolio manager and manages the team to continuously monitor the portfolio. The portfolio manager must have the following capabilities and characteristics:
- Having expertise in managing the portfolio management team
- Ability to conduct fundamental and deep research in all types of financial markets
- The ability to predict various markets and investments
By actively implementing applied capital management by these people, the error rate decreases and the probability of success increases. Investment managers implement the most efficient investment strategies according to various open aspects. For this purpose, these people consider the following:
- Changing political perspectives
- Trends in various financial markets
- Fundamental changes in the economy
- News affecting the market and companies
Passive capital management
In passive capital management, according to the current conditions and trends of the market, investments are made in different parts. In fact, in this type of management, the same initial review is limited and the various cases that were reviewed in active capital management are no longer taken into consideration. In this method, portfolio management is done by adopting a long-term investment strategy and by trusting the initial decisions, continuous follow-up is abandoned.
Discretionary portfolio management
The meaning of this type of portfolio management is to trust the opinions of an experienced and professional manager who is introduced as the most profitable portfolio manager in personal digital currency portfolio management. In this portfolio rotation method, you trust a professional and manage and divide your digital currency portfolio according to his opinions. Usually, to use this method, people refer to specific companies providing these services and provide their capital to these companies. In this method, the performance of the portfolio manager or portfolio manager depends on his abilities, and this person must have the following skills:
- Ability to identify important trends and factors affecting the market
- High analysis value of financial markets
- Ability to consider people's financial strength and plan accordingly
Non-Discretionary Portfolio Management
In this type of capital management, people can be more involved in managing their digital currency portfolio. In optional portfolio management method, the person or company selected by you to receive advice will give you their suggestions and you will decide how to act and invest.
Therefore, in this type of digital currency portfolio, your capital is not given to other companies and individuals, and only you receive advice from these people. Each person will plan his personal digital currency portfolio based on the advice received.
Creating diversity in the digital currency investment portfolio
In case of diversification in the investment portfolio, the loss in one asset will be compensated by the profit in another asset. In fact, diversity in the asset portfolio makes your portfolio stable. Usually, all digital currency traders and investors consider their attitudes and strategies valid in creating a digital currency portfolio. However, there are some important and general principles that they usually use in their decision-making:
Diversification of assets
In creating a digital currency portfolio, assets with different risks such as low, high and medium risk should be balanced. This is to assign appropriate weights to each asset in your cryptocurrency portfolio. The purpose of investment and your risk tolerance determine the selection of these weights.
Attention to stable coins
Allocating part of the capital to stable coins is one of the most important principles of digital currency portfolio management. The presence of this type of digital currency in the portfolio helps to provide the liquidity of the portfolio and protects it from extreme market fluctuations.
Prevent damage to balance
If you have recently made a good profit from an asset, it is not recommended to re-allocate capital to that asset alone. Usually, the presence of different assets in the digital currency portfolio is always useful and prevents it from becoming unbalanced.
Periodic balancing
Due to the lack of stability in digital currency markets, periodically balancing the portfolio over time is important. This means the number of different assets and the right number of changes in your portfolio.
Creating the best digital currency portfolio
In the following, we will discuss some significant indicators that will guide you in choosing assets to build a suitable portfolio:
Market value
What shows the impact and importance of a currency in the market is the market value of a cryptocurrency compared to all digital currencies in the market. For example, Bitcoin, which constitutes a significant share of the market value, is an example of market dominance. Currencies with a low market value are likely to suffer from the fluctuations of the digital currency market.
Application
When choosing cryptocurrencies to build a digital currency portfolio, attention should be paid to their future uses and goals. For example, Ethereum, through its ecosystem, allows decentralized projects to be built on its blockchain infrastructure.
Turnover
To build the best digital currency portfolio and choose the best cryptocurrencies, you should check the number of daily transactions and the volume of transactions.
Market news and sentiments
News related to market behavior and cryptocurrencies can have a significant impact on investors’ decisions.
sustainable development
Ensure the importance of the technology behind each digital currency in order to realize the goals of that currency in the long term.
Advantages of digital currency portfolio management
Below we mention some of the advantages of digital currency portfolio management service by experts and forex portfolio management companies:
Increase profitability
With their experience and knowledge, portfolio managers make transactions that increase the profitability of the investment portfolio.
Risk reduction
Digital currency portfolio management helps the investor to reduce its risk by diversifying the investment portfolio. In fact, with a diversified digital currency portfolio, the investor will not be vulnerable to price fluctuations of a particular currency.
Access to new investment opportunities
Due to their extensive connection with the market, portfolio managers have the possibility to access new investment opportunities. These kinds of opportunities may not be available for small and inexperienced investors.
Save energy and time
By entrusting your digital currency portfolio to portfolio managers, you will save energy and time, and you will no longer need to analyze market behavior and study. These people constantly monitor the market and choose the best time to make transactions.
Disadvantages of digital currency portfolio management
In addition to the advantages mentioned about digital currency portfolio management, there are also disadvantages that must be considered for those who decide to do so. My emphasis is to avoid entrusting your capital to brokers.
Because many claimants may cause you to lose your capital. On the other hand, young people should also avoid accepting other people’s capital for their profit. If necessary, it is better to make a contract so that people take responsibility for their actions in profit and loss.
Fraud
Some forex trading companies and claimants are scammers. These people and companies steal and defraud people by attracting capital from them.
Digital currency portfolio management fee
Digital currency portfolio management is done by paying a fee from investors. The digital currency portfolio management fee can include a percentage of the value of assets under management or a fixed fee.
Lack of transparency
Some people and companies claiming to manage digital currency portfolios do not report their performance to investors in a transparent manner. This makes it difficult for investors to decide to continue cooperation and evaluate the performance of the portfolio manager or portfolio manager.
Risk
Digital currency portfolio management, like any other investment, is associated with a lot of risk. In fact, this will not guarantee the permanent profitability of your investment.
Incorrect prediction
In digital currency portfolio management, historical data is used in order to evaluate returns, which sometimes may be unreliable and wrong and lead to incorrect predictions.
Picking a basket
If you entrust your digital currency portfolio to inappropriate and inexperienced people, your capital may suffer heavy and even irreparable losses.
Minimum capital for portfolio management
The minimum capital required to open an account in most companies that provide digital currency portfolio management services is usually from fifty million to one billion and even more.
The danger of too much diversity
If the portfolio manager diversifies the portfolio too much, it becomes difficult to control the capital and the losses in this situation are high. In this case, serious consequences will await you.
Ultimately, deciding to use digital currency portfolio management services depends on your goals and opinion. But according to my analysis, handing over your digital currency portfolio to claimants may have a high risk of losing your capital.
Is digital currency trading good or bad?
Today, many people are interested in digital currency and investing in this market. Therefore, the number of basket makers is increasing day by day. Currently, it is very difficult to choose a basket maker with high skill. Unfortunately, some people pretending to make a profit through digital currency transactions, introduce themselves as basket makers without any sufficient knowledge and expertise and cause huge losses for investors. In addition, digital currency portfolio management contracts, which are established by portfolio managers, have a specific period of time.
After the end of the contract, the investor must again bear the cost of managing the digital currency portfolio under the title of fee. In addition to the aforementioned disadvantages of portfolio management by legal entities, we also point out other disadvantages below:
- People who take action to terminate cooperation before the time of the contract; They have to pay a fee as a fine to the basket holder.
- The portfolio manager only participates in the profitability of the investment, and the losses and losses of the transactions are only for the investors.
- Most digital currency portfolio management companies consider a lot of capital to start a contract.
What is the functional area of digital currency portfolio management?
Digital currency portfolio manager starts investing in digital currency markets by directly and indirectly attracting capital. These people with their expert team continuously and continuously using their consistent trading strategies make profits by buying and selling and trading digital currencies on a monthly and yearly basis. The profit of the investment is divided between the investor and the portfolio manager.
Investing in digital currencies with portfolio management is suitable for whom?
In general, the following people can manage digital currency portfolios:
- People who in these economic conditions decide to preserve the value of their capital against inflation and increase the value of their capital day by day.
- People who intend to invest in the cryptocurrency market, but do not have enough knowledge, experience and time in this field.
- Those who, in addition to their main job, tend to have monthly and continuous income and profitability in this way.
Steps of investing in digital currency portfolio
To invest in the digital currency portfolio, the following steps must be taken:
- Research and selection of a suitable and expert cart operator
- Opening an account in the considered portfolio companies
- Transfer of funds to the portfolio account
- Signing a digital currency portfolio management contract sample
- Monitoring the performance and actions of the bank manager
Sample contract for portfolio management of digital currency
If you decide to hand over your capital to people active in the field of digital currency portfolio management, you should do so by knowing the portfolio manager in question and doing thorough research. Never transfer your capital to natural and legal persons without registering an official contract. In fact, they believe that as soon as possible, you should avoid accepting capital from other people and handing over your capital to claimants. But if you decide to do this, make sure to set up an official contract with the people handling the basket before taking any action, so that you can follow up in case of any problems.
The example of the digital currency portfolio management contract is almost similar to the portfolio management contracts of the Iranian stock market. In the example of the digital currency portfolio management contract, the name of the parties, the amount of initial capital, the portfolio management time, the percentage of the portfolio management fee, the name of the trading exchange, and two witnesses, if desired, are specified. Also, you should note that your profit and assets are actually the profit of the broker and these people share in your profit.
Digital currency portfolio management license
Considering the nature of the digital currency markets and the existing sanctions in Iran, there is currently no active institution in our country with a license to operate a digital currency portfolio. Therefore, no collection has a license to manage digital currency. If someone claims to have a digital currency portfolio management license, be aware that he is probably a fraud.
What should be done in this case?
- To increase security against fraud, you should ask the company or the person carrying the portfolio to carry out the transactions on your own exchange.
- Just provide the user name, password and access code to the exchange for the cart operator and be sure to pay attention to the email requests based on withdrawal of funds.
- As much as possible, try to sign a digital currency portfolio management contract with reputable and well-known companies and individuals.
- Sign a clear and written digital currency portfolio manager contract for handing over money in the exchange with the portfolio manager or persons.
Digital currency portfolio management scam
Digital currency portfolio management is one of the methods of digital currency fraud. Of course, in the meantime, there may be some people with sincerity and high expertise and experience who have invested for users and are looking for good profits for them. However, it can be said that the percentage of these people is low.
Many brokers and portfolio brokers commit fraud in this market and waste users’ capital. Not knowing the digital currency market and the investment method is one of the problems that users fall into the trap of these people. Therefore, with my many years of experience in the capital market, I would like to point out that as much as possible, avoid trusting people who claim to manage digital currency portfolios.
Important points in choosing a digital currency portfolio manager
When choosing a digital currency portfolio manager, you should pay attention to the following points:
Basket operator experience and knowledge
The portfolio manager must have sufficient knowledge and experience in the field of digital currencies. If you do not have experience and specialized knowledge in this field, your capital may be lost.
History of performance of the basket maker
These people must have high experience and history in the field of investing in digital currencies. If the capital is given to new people, the risk of capital loss and wrong predictions increases.
Investment methods in portfolio digital currencies
The portfolio manager should use his knowledge in this field of the best strategies and attitudes to invest in digital currencies.
Portfolio management fees
The cost of portfolio managers should be mentioned in the contract that is set before the transfer of capital, the portfolio manager’s percentage of the capital profit or the fixed fee received.
This type of investment allows investors to provide their capital to portfolio managers by setting up a contract. Companies and portfolio managers will invest capital in the cryptocurrency market on certain currencies in the long term and short term and will buy and sell digital currencies at the most appropriate time.
The important things in digital currency management portfolio include careful selection of portfolio management, adjustment and review of contract clauses, checking the amount of profit and loss, etc.
The method of investing in digital currency is that you set up a contract after communicating with the people and your trusted portfolio management company. Then you transfer your capital to the company after receiving the copy of the contract and receipt. Then a certain interest will be deposited into your digital currency wallet on a monthly and yearly basis.
Investing in different portfolios is different. First of all, you must enter into a contract with a reliable company or legal entity that has the possibility of legal follow-up. Then you have to examine the amount of profit and loss of the basket maker. According to Mr. Farhad Moghadam Salimi, handing over the capital to the claimants is prohibited due to the high risk of doing so.
