More than a million Bitcoin have vanished because owners didn’t plan ahead. Without a crypto inheritance plan, your family could lose access to your assets forever. Here’s how to safeguard them.
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As digital assets become a core part of personal wealth, one uncomfortable question lingers: what will happen to your crypto when you’re gone? Unlike traditional assets that can be managed through banks or brokers, cryptocurrencies are bound entirely to whoever holds their private keys. Lose the keys, and the funds are gone. Permanently.
Each year, millions of dollars in Bitcoin, Ether, and other tokens vanish into the digital void when holders pass away without sharing access. It is estimated that around 1.5 million BTC (roughly 7.5% of total supply) may already be lost forever. With digital wealth now part of countless estates, preparing for the inevitable is no longer optional; it’s the responsible thing to do.
Why Planning for Crypto Inheritance Matters
In traditional finance, wealth transfer is handled through wills, trusts, and custodians. But crypto flips that model: you are the bank. Your heirs can’t simply request a password reset or call customer service. Without private keys, wallets, or access instructions, those assets are unrecoverable for all effects and purposes.
A crypto inheritance plan ensures that your digital assets, from Bitcoin and altcoins to NFTs and DeFi holdings, remain both secure and accessible to the people you choose. It bridges two crucial needs: protecting your funds today and ensuring your legacy tomorrow.
Beyond personal security, inheritance planning also reduces emotional and financial stress for your loved ones. By documenting how and where assets can be accessed, you prevent confusion and potential legal disputes.
Building the Foundation of a Crypto Inheritance Plan
Start with Legal Clarity
Consult an attorney familiar with digital assets. A properly structured will or trust should identify your crypto holdings, list beneficiaries, and outline how they can access those funds. Many jurisdictions still lack explicit laws for digital assets, so expert guidance helps ensure compliance and enforceability.
Secure Your Keys… But Don’t Overshare
The biggest challenge in crypto inheritance is private key management. If you die with your keys, your crypto dies with you. However, leaving keys in plain text within a will or document is just as risky. Instead, consider approaches like:
- Multisignature wallets, which require multiple approvals to move funds.
- Shamir’s Secret Sharing, which means splitting your seed phrase into parts distributed among trusted people.
- Encrypted backups or sealed letters stored in secure, offline locations.
Document recovery procedures in plain language so your heirs can follow them even without technical knowledge.
Choose the Right Executor
A traditional executor may not understand how to navigate crypto. You can appoint a tech-literate executor or designate a digital asset custodian to handle that portion of your estate. This ensures smooth execution and reduces the risk of errors or loss.
In a market driven by innovation and constant change, a well-structured inheritance plan offers something rare in crypto, certainty.
New Tools for a Digital Age
The rise of blockchain-based “death protocols” and smart contract automation adds a new layer of possibilities. Some platforms allow transfers to trigger automatically after certain conditions are met (for example, a verifiable death certificate or extended inactivity).
Ethereum and similar chains already support programmable inheritance systems, but these should complement, not replace, legal documents. Technology can help enforce your intentions, but law remains the foundation of inheritance.
Some investors even use “dead man’s switches”, automated systems that transfer funds if the owner doesn’t log in for a set period. While clever, it might be best to pair them with legal documents to prevent accidental activations.
Protecting Privacy While Planning Ahead
While planning for the future, it’s crucial to maintain security in the present. Avoid including wallet addresses, private keys, or passwords in public wills, which become part of the legal record. Instead, store such details in encrypted files or sealed envelopes accessible only to specific individuals.
Tools like decentralized identifiers (DIDs) and verifiable credentials can also help manage long-term identity and access rights. These systems allow you to define who can access what, and when, without intermediaries.
Custodial vs. Non-Custodial: Finding the Balance
When structuring inheritance, knowing whether your assets are held in custodial or non-custodial wallets makes all the difference.
Custodial services (like major exchanges) manage private keys on your behalf, which simplifies recovery if your heirs can provide proper documentation. However, it introduces third-party risk. Accounts can be frozen, hacked, or shut down.
Non-custodial wallets, on the other hand, offer maximum control and privacy but demand greater responsibility. If your heirs lose the seed phrase, there’s no backup plan. There’s also the possibility of taking a hybrid approach: keeping long-term holdings in non-custodial storage for security, while using reputable custodians for smaller, more accessible amounts.
Keep It Up to Date
A crypto inheritance plan is not a “set it and forget it” document. Prices change, portfolios evolve, and wallet technologies become obsolete very often. It may be wise to revisit your plan regularly, especially after major life events such as marriage, divorce, or the birth of a child.
It’s also worth keeping track of regulatory updates in your jurisdiction. Laws surrounding digital assets and inheritance are rapidly evolving, and what’s compliant today may not be tomorrow.
Common Inheritance Pitfalls
Even the best intentions can go wrong. Here are the most frequent mistakes to avoid:
- Including seed phrases directly in your will. As we mentioned before, this makes them public and vulnerable.
- Neglecting to educate heirs. Without guidance, even secure plans can fail.
- Relying solely on exchanges. Centralized platforms can fail or freeze funds.
Planning isn’t just about distributing wealth; it’s about ensuring continuity. A clear inheritance strategy preserves your crypto’s value and prevents it from becoming part of the estimated $100 billion in lost digital assets worldwide.
Protecting More Than Just Coins
Preparing a crypto inheritance plan isn’t merely about money; it’s about legacy. For all the talk about decentralization and autonomy, responsibility and forward-thinking remain at the heart of crypto ownership. By taking the time to plan ahead, you safeguard not only your wealth but also your family’s peace of mind.
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If you have stayed around the cryptocurrency market long enough, then you will be familiar with the term “crypto whale”. This term usually refers to big players in the crypto space that are known to hodl and move around large amounts of any given coin, often affecting the price while they’re at it. We’ll discuss how whales are affecting the cryptocurrency market by considering the following:
Who is a Whale
In the cryptocurrency market place, the term whale is used to describe any individual or group that controls a large amount of Bitcoin or cryptocurrencies. Just like the size of the whale distinguishes it in the ocean, portfolio size of these individuals or groups sets them apart in the crypto industry.
It is estimated that roughly 40% of all the Bitcoins in existence are held by only about 1,000 people. That is some huge volume to deal with, no matter the ratio among them. Some of these whales are well known individuals and groups. Roger Ver, the Winklevoss Twins and Charlie Shrem are some of the well known individuals that control large volumes of Bitcoin. While Fortress Investment Group and Pantera Bitcoin Fund are examples of group whales.
The majority of today's whales consist of early adopters who allocated substantial funds to acquire Bitcoin and cryptocurrencies during periods of lower prices. The Winklevoss twins, for instance, directed $11 million into this venture, a fraction of their payout from a Facebook intellectual theft lawsuit involving Mark Zuckerberg. This endeavor granted them ownership of 100,000 Bitcoins, which are now valued at over $1.1 billion.
Do Whales Manipulate the Market?
Most whales are hodlers, therefore are expected to retain their holdings over an extended period of time, especially as Bitcoin seems to retain so much upside potential. However, from time to time, since the blockchain network is open and everyone can view the transactions that go on, we see huge volumes being traded. Apart from that, whether in the buying or selling direction, the trades of these whales always have an impact on the market.
Smaller traders most often seek to ride the trend on which whales are trading. Therefore, when these trades happen, the market seems to follow the whales. This is one major way how whales are affecting the cryptocurrency market. They determine the direction.
This kind of behaviour has caused some suspicion within the industry with people accusing the whales of manipulating the market. Although this behaviour is frowned upon, it isn’t technically breaking any laws. A typical scenario illustrating this is when whales initiate a massive sell-off of Bitcoin or any other crypto. Smaller traders will follow suit after the price has dropped. Afterwards, the whales buy back their crypto at a much cheaper rate, making a lot of money in the process.
However, it is also fair to realise that most of these whales are long term investors who are astute hodlers of Bitcoin and cryptocurrencies. Therefore, we cannot always accuse them of manipulating the market, even though they have the capacity to do so.
How Can You Trade Like a Whale?
What we should be concerned about is if there will come a time that these whales will want to recover their capital. Would there be a massive sell-off of Bitcoin and cryptos, and how will it impact the market? Well, the Bitcoin and cryptocurrency market is still young, and we expect the system to last for a very long time before any such thing can be anticipated.
Whether there are whales in the market is not a question. Also, whether their actions have any impact on the market has also been established. What traders like to know is the heartbeat of these major stakeholders in the industry. This could serve as a fundamental factor in determining what to expect from the markets. Real time prices and market capitalization with respect to volume are areas where we can determine which way the whales are moving.
Emulating the trading strategies of prominent crypto whales involves understanding some of their key practices. These influential traders often possess significant resources, enabling them to execute substantial trades. To gain insights from their approach, consider the following principles:
- Informed Decision-making: Stay well-informed about the cryptocurrency ecosystem by keeping up with reputable news sources and reliable platforms. Understanding market trends, new projects, and potential events can contribute to better decision-making.
- Analytical Approach: Utilize a blend of technical and fundamental analysis. Technical analysis involves studying historical price data and chart patterns, while fundamental analysis focuses on evaluating the intrinsic value and growth potential of a cryptocurrency.
- Risk Management: Prioritize risk management to safeguard your capital. While crypto whales can tolerate losses, individual traders should be cautious. Implement risk management techniques like setting stop-loss orders and diversifying your portfolio.
- Adaptability: Remain adaptable to changing market conditions. What works in a bullish market might not be effective during a bearish phase. Being open to adjusting your strategies can be beneficial.
- Patience and Discipline: Practice patience and discipline in your trading approach. Crypto whales often wait for favorable opportunities, and exercising restraint can prevent impulsive decisions.
- Network and Insights: While crypto whales might have access to insider information, you can still benefit from networking within the crypto community. Engage with knowledgeable traders and participate in discussions to gain insights.
- Learning from Mistakes: Mistakes are inevitable, even for crypto whales. Use your experiences as learning opportunities, and continuously improve your trading strategies.
Remember, while understanding the strategies of crypto whales can offer valuable insights, individual trading outcomes vary. The crypto market carries inherent risks, and any trading decisions should be based on careful consideration and personal risk tolerance.
When used to using the traditional banking system, learning how to pay and get paid in crypto might sound daunting. While there are a lot of factors to consider, it’s really a lot more simple than one might imagine.
Below we’re taking a look at the advantages of using digital currency to pay and get paid, and how to go about doing this safely and securely.
The first proper use case of blockchain as we know it today was money. Bitcoin was designed as a decentralized digital means of transacting value at a faster and cheaper rate than traditional fiat currencies. Over a decade later and this still remains the case for digital assets.
Cryptocurrencies like Bitcoin allow individuals to be paid quickly and simply regardless of where they are in the world. However, crypto operates in a very different way to traditional banking systems, which means you'll need to understand your way around it first.
The Advantages of Using Crypto Payroll Services
The nature of cryptocurrencies allows crypto payroll services to offer several benefits for both employers and employees, particularly when the parties are located in different countries. The advantages are in part because there is no middleman concerned when using virtual currencies, which results in lower transaction fees, faster transaction speeds, and higher dependability.
The Advantages of Digital Currencies for Businesses
Small enterprises face intense rivalry from bigger businesses in a global economy. Small companies, particularly in the tech space, may lack local expertise making foreign job markets more attractive.
It’s often the case that those skills are available remotely, and often at a much better price, but accessing remote workers can be difficult, mostly due to the problems of sending money overseas. This can be a costly, time-consuming and unreliable process.
Some workers with the right skills simply won’t have access to the banking infrastructure or services that allow them to accept money from overseas employers.
This is where cryptocurrencies come in. You can use Bitcoin or other cryptocurrencies to access the international gig economy of digital nomads and highly-trained specialists.
Because cryptocurrency allows you to transfer funds at a significantly lower cost than traditional services, you won't have to worry about one person having to pay the costs of remittance, which can be costly when using conventional money transmission platforms.
No matter how much money you’re sending, Bitcoin transaction fees are considerably lower than fiat currency, typically less than $1, allowing businesses to outsource small jobs or split a project into smaller parts. This can ensure that all parts of the project are given to a contractor who has the right skills and is a good fit for your firm.
The Advantages of Digital Currency for Individuals
There are several benefits to accepting crypto payments, which might even outweigh the advantages for businesses (which, of course, makes implementing Bitcoin payroll procedures a lucrative option for organizations that need to hire remotely).
- First and foremost, getting paid in crypto is faster and more efficient than international fiat payments. Cutting out days, foreign exchange charges and hefty fees, crypto transactions are settled in a matter of minutes for a fraction of the cost.
- Accepting crypto allows the individual to accept remote work, allowing for a greater scope of projects and companies. Working with companies with no geographical borders can present some incredible opportunities, more of which revolve around better income and more exciting projects.
- Working with cryptocurrency transactions allows for small amounts of money, whereas previously with fiat currency the charges would be too high to do so. This allows the individual to take on many small jobs across a range of businesses or interests.
- As some cryptocurrencies, like Bitcoin, provide a strong store of value, this allows users the chance to be more flexible with their funds, perhaps storing crypto assets away as savings (cryptocurrency holdings) which in time will ideally grow. Some crypto platforms, like Tap, even allow users to pay bills using their crypto balances.
The Legal Status Of Crypto Payments (and capital gains tax)
While Bitcoin transactions are completely secure, fast, and inexpensive, there is one element one will need to consider, and that is the legal status of cryptocurrencies in one’s jurisdiction.
Most nations have favorable regulations in place when it comes to receiving, sending and storing cryptocurrencies, however, it differs from country to country so it is important to check this prior to diving right in.
On top of that, one must check the tax obligations relevant to your jurisdiction. Some countries treat crypto salaries as taxable income, while other countries treat it as capital gains tax. Check with a professional in your area should you need to.
How To Pay With Bitcoin
If you’re looking to pay employees in Bitcoin you will first need to get Bitcoin. You can acquire the cryptocurrency in one of three ways: mining, buying or receiving it as part of your business’ income. Depending on the services your company provides, it is most likely that you will need to buy Bitcoin before paying workers, which you can do conveniently and securely through Tap.
When you pay your workers with cryptocurrency payments, you will send them a dollar-equivalent amount of Bitcoin, relevant to the price of Bitcoin at the time of transfer. For example, if the price of Bitcoin is $50,000 and you owe them $2,500, you will need to send them 0.05 BTC.
Most exchanges will calculate this for you, showing the current dollar/crypto exchange rates. Tap also ensures that users receive the best price on the market at any given time through smart trade technology.
How To Get Paid In Cryptocurrency
For contractors who want to get paid in Bitcoin or other digital currencies, the approach is much the same only in reverse. However, you’ll need to consider what you want to do with the cryptocurrency you receive, and how you will store it.
Tap provides the perfect solution to both options as you can securely store your Bitcoin and other cryptocurrencies in the wallet provided, while also being able to use your crypto or fiat balance to pay fiat bank accounts and municipal bills and make other payments.
Receiving and sending crypto is simple. All you need to do is open your Tap app, select the cryptocurrency you would like to receive and locate the relevant wallet address. Share this with your employer and the funds will be deposited directly into your account. Yes, it's really this easy.
In Conclusion
There are several advantages for businesses that pay their employees or freelancers in Bitcoin, as well as contractors who want to get paid in Bitcoin. These include fast, low-cost, and secure transactions regardless of where the parties are located, as well as access to a global market of employment and labor.
It's the perfect way to optimize operations, lower expenses, and find the best man for the job.
Bitcoin, and many other cryptocurrency markets, have seen a phenomenal influx of funds recently, with the overall market cap reaching just shy of $3 trillion. This bullish market presents an advantageous set-up to make money. Trading, while profitable, introduces an array of issues that may be hard for newbies to overcome.
If you are looking to make profits without the added risks then investing may be your best bet. But before you get into investing, there are some basic concepts you will need to grasp in order to make an informed decision. In this article, we're covering how to invest in Bitcoin and cryptocurrencies and what the difference is between investing and trading.
Investing vs Trading
To make a long story short, investing refers to long-term holdings while trading refers to short-term holdings, both are seeking profits within the market.
Generally speaking, investors are after greater returns over a longer period of time while traders seek to draw smaller, more frequent returns from rising and falling markets in a much shorter time frame. Trading thrives off of volatile markets, whereas investing seeks more stable options for longer-term rewards. Both provide the opportunity for profits, but each has benefits and flaws of its own.
For newbies and those who have a more busy lifestyle, investing is the best option as it does not depend on your understanding and monitoring of market movements. Trading on the other hand is more of a career path, it requires considerably more time dedication, while also holding greater risk. As the saying goes, all traders should be investing but not all investors should be trading.
It's important to note that both investing and trading have their own tax regulations and it is on the individual to find out and adhere to these laws. Bank on paying taxes on any returns made, as a general rule of thumb, but always research the guidance information relevant to your jurisdiction, i.e. tax paid on crypto returns will vary from the UK to Germany.
Bitcoin vs Altcoins
Bitcoin, the first cryptocurrency to come into existence, boasts an impressive market cap and is the highest valued cryptocurrency to date. After it launched in 2009, many cryptocurrencies followed suit and were coined "alternative coins" which soon became shortened to altcoins. While these originally focused on payment-centred cryptocurrencies, today the term altcoin essentially refers to any cryptocurrency that isn't Bitcoin.
When it comes to investing and Bitcoin vs altcoins, Bitcoin has proven to be the most valuable coin however there are plenty of small to medium cap markets that experience incredible growth. Consider Bitcoin's large price point to be a hindrance to short term investments, but more powerful in the long run.
To put it into perspective, data shows that if you invested $50,000 into Bitcoin when it was trading around $60,000, you would have to wait for Bitcoin to hit $120,000 before you double your investment. However, if you invested that same $50,000 into an altcoin when it was worth $1, it would only have to reach $2 for you to double your money which is a lot more likely than Bitcoin doubling in the same period. However, this doesn't ring true to all altcoins and one must always do thorough research before investing.
Altcoins come in all different shapes and sizes, some tackling industries from medical to real estate, all backed by the financial aspect of blockchain technology. Investing is about more than just profits, it is also about the project. Is it something you are interested in and could benefit from in the future? Is it something that could change the world for the better? Does it have real-world use cases?
All of these are factors to consider when planning to invest. The potential behind the project is oftentimes what secures it as a viable investment option, promising great opportunity for adoption, stability, and growth. At the end of the day, investing in altcoins requires a considerable amount of research.
Where And How To Invest
The first thing you need to consider is which exchange and wallet you will be using. Long term investments mean you need to find a platform you can trust to store your funds in a longer-term time frame. This is the key to securing your investment, rather than coming back a year or two later to discover your funds are gone.
Some people recommend companies offering hardware wallets to reinforce that investment "do not touch" mindset while others prefer web wallets that are more accessible. It's really up to you which platform you decide you go with, considering all the features and factors, your needs, and confirming your decision with your own research. Make sure to stay up to date on the platform you are storing your funds on to be alerted of any software upgrades, if any hacks occur or if a platform closure notice goes up.
At Tap, we have integrated a hyper-secure wallet into our mobile app, allowing anyone, anywhere to securely store their funds. We are licensed and regulated by the Gibraltar Financial Services Commission and hold insurance of up to $100 million, ensuring the protection of your digital assets at all times. The mobile app also grants users access to a number of cryptocurrency markets, where you can freely buy, sell and manage your portfolio.
Final Thoughts
Investment as a term isn't a difficult concept to catch onto, but finding the right investment is the important part. It is always recommended that you do your own research, and in-depth analysis at that, and don't be scared to diversify your assets. The investment world is yours for the taking, so get out there and start building a lucrative investment portfolio.
FAQ
What is Bitcoin and how does it work?
Bitcoin is arguably this century's greatest innovation: a decentralised digital currency built on blockchain technology that allows for the transfer of value across the internet. This peer-to-peer digital cash system facilitates international payments at a fraction of the cost and time that fiat transactions of that nature take and are as simple as sending an email. Instead of being controlled and managed by banks or government entities, new coins are regularly entered into circulation through the process of mining. You can learn more about Bitcoin, blockchain transparency, and its lack of intermediaries from our guides.
Should I invest in Bitcoin?
As mentioned above, Bitcoin holds great market potential for both investors and traders. Since 2009, Bitcoin has performed well in terms of displaying strong ROIs, something most investors see as a benefit for future gains. However, investing in Bitcoin comes with its own risks that each individual should consider before entering the market. As a rule, never invest more than you are willing to lose.
Which are the three biggest cryptocurrencies?
Currently, based on market cap the three biggest cryptocurrencies are Bitcoin, Ethereum and Tether.
What are the alternatives to Bitcoin?
Alternatives to Bitcoin are referred to as altcoins. While there are thousands of cryptocurrencies on the market, not all are worth investing in. It's best to research each coin individually and weigh up the project before investing in it. Consider a cryptocurrency as a company, and purchasing coins as buying shares in the business.
Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice. The information herein does not constitute an offer to sell or the solicitation to purchase/invest in any crypto assets and is not to be taken as a recommendation that any particular investment or trading approach is appropriate for any specific person. There is a possibility of risk in investing in crypto assets and investors are exposed to fluctuations in the crypto asset market. This communication should be read in conjunction with Tap's Terms and Conditions.
Used across both the crypto market and traditional stock markets, return on investment (ROI) is a financial measure used to calculate an asset's growth and efficiency over a period of time. This useful measure has been used for decades to determine the success of one's investment.
In this article, we'll help you learn how to calculate the ROI on your investment so that you can implement it across your portfolio to determine your successes. Understanding your assets' ROI might lead to improved sales and revenue and solve a problem that many traders face time and time again.
Many businesses offering trading services might include a project ROI in their monthly or annual report to a customer, illustrating the successes of the site in black and white figures. However, be cautious when a company uses a set amount of return on investment statistics in their advertising, not even the top trading experts are able to predict with exact certainty the events, analytics and metrics that will take place in the future.
How To Calculate ROI
Bear with us as this gets slightly technical, it will all make sense in no time. This formula essentially revolves around determining the overall profit or loss one has made from a particular investment.
The formula used to determine ROI is ROI = (FVI - IVI) / IVI * 100%. In this formula, the FVI stands for the final value of an investment while IVI stands for the initial value of an investment.
Looking at a practical example, say you bought $1,000 worth of Bitcoin in January 2020 when it was trading for $8,807. Two years later you sell your Bitcoin in January 2022 when it was trading at $43,704 for $3,960.
In this scenario, the IVI is $1,000 while the FVI is $3,960. ROI = (FVI - IVI) / IVI * 100% translates to:
ROI = (3,960 - 1000) / 1000 * 100%
ROI = 296%
This equation is considered a base formula as it does not include additional factors like fees and expenses incurred when storing the asset. In order to establish the true ROI on your investment, you would need to determine what additional costs were incurred (transaction fees for example) and use the following formula:
ROI = (FVI - expenses - IVI) / IVI * 100%
Additional Elements To Consider When Calculating ROI
One thing that ROI does not factor in is the risk associated with the asset. For example, higher ROIs typically come with higher risks while assets with lower ROIs typically hold a much lower risk in terms of gaining returns.
This holds true in the crypto market where new coins can suddenly soar in price creating a strong ROI for those that invested early. However, this ROI data will not be the same for an investor that enters the market at a later stage, and the risk will be much greater. Be wary of analysts using ROI statistics in digital marketing to make far-fetched conclusions about an asset's future success. Always use Google as a tool to verify the information, particularly for smaller coins.
Another limitation of this approach is that time is not taken into consideration. For instance, if your investment appreciates from $100 to $150, the ROI will always be 50% whether this happened over one year or ten years. This issue can be solved by using another formula, known as the annualized ROI.
What Is Annualized ROI?
This method illustrates the standardized annual rate of return on investment by considering the investment's tenure, providing insight into the money an investment product has yielded over a certain period of time. This formula will calculate the investment's average performance each year over the entire period.
The formula for annualized ROI is Annualized ROI = ((1 ROI) 1/n - 1) * 100%. Here, n represents the number of years of the investment.
Using the latter example above, your $100 growing to $150 will present an annualized ROI of 50% for one year while the ten year annualized ROI is 4.14%. A substantial difference, and one you wouldn't pick up on from using the standard ROI formula.
What Is Bitcoin's ROI?
As the world's first cryptocurrency, Bitcoin has seen some incredible increases in price. Analysts often use the formulas outlined above for tracking the digital asset's short-term, medium-term, and longer-term ROI.
As of January 2022, these ROIs are calculated using the trading price of $43,834.36 (at the time of writing).
Short-term - 1 year (January 2021)
BTC Price: $33,922.96
ROI = (43,834.36 - 33,922.96) / 33,922.96 * 100%
ROI = 29.29%
Medium-term - 2 years (January 2020)
BTC Price: $8,807
ROI = (43,834.36 - 8,807) / 8,807 * 100%
ROI = 3,977.21%
Longer-term - 5 years (January 2017)
BTC Price: $818.41
ROI = (43,834.36 - 818.41) / 818.41 * 100%
ROI = 5,256.03%
These are wildly impressive results, particularly when compared to the traditional stock markets. Excuse us while we go question our personal ROIs for our crypto investments.
Much like traditional stock portfolios, crypto portfolios can too be balanced to ensure a spread of returns and risks over the asset class. Building a diversified cryptocurrency portfolio can be done in many ways, however, in this article, we will be exploring a general approach that investors can use to build their own.
From thoughtful diversification to asset allocation to buying your cryptocurrencies, the road to building a balanced crypto portfolio is not a complicated one. It will require some upkeep though, so be sure to factor in that you will need to balance your portfolio regularly.
Starting with the basics, a cryptocurrency portfolio is a collection of varied crypto holdings held by an individual (these portfolios hold one asset class, while others can hold multiple asset classes and would require further asset allocation).
Some investors also choose to use a third party tracker which calculates the portfolio’s holdings and profits. A balanced portfolio will have a collection of coins, products and tokens, each with its own risks and rewards.
It should have a mixture of high and low market cap coins and might look something like this: 35% Bitcoin, 10% Ethereum, 25% stablecoins, 15% NFTs, and 15% altcoins (this is an example based on the current climate of the cryptocurrency market and not financial advice).
The 5 main types of cryptocurrencies on the crypto market
Before we start building our portfolios, let’s begin with understanding the 5 main categories that can be found on the cryptocurrency market today.
Most of the 20,000 cryptocurrencies on the market at the moment will fall into these options.
Payment Focused
Consider these the original first-generation cryptocurrencies, starting of course with Bitcoin. Many earlier projects were designed as systems of transferring value, take for example Ripple (XRP), Litecoin (LTC) and Bitcoin Cash (BCH).
These types of coins typically have a high market cap.
Stablecoins
This category refers to all coins that are pegged to a fiat currency and commodity. These coins naturally bypass any volatility, ensuring a stable anchor in your portfolio and a safe haven for when the markets experience a dip.
While they might seem to represent more traditional assets, stablecoins provide a valuable contribution to the crypto ecosystem.
Examples include PAX Gold (PAXG) which is pegged to the price of gold, while options like Tether (USDT) and USD Coin (USDC) are pegged to the US dollar.
Utility Tokens
Utility tokens are unique to their ecosystems and generally offer a product or service. This could come in the form of a coin used to pay transaction fees on a network, or a coin created to launch a crowdfunding initiative.
Examples include coins found on dapp and smart contract development platforms, Ethereum (ETH) and Binance Coin (BNB).
Security Tokens
Much like the traditional securities in the stock market, security tokens can take on many forms.
These digital forms of traditional securities have been integrated with blockchain technology and span across three categories: equities, debt and a hybrid of debt and equity. This can range from representing a bond issued by a project, equity in a company, or even voting rights.
Governance Tokens
Governance tokens offer holders voting powers and a share of the project’s revenue. Similar to utility tokens, the value of a governance token directly relates to the success of the underlying project. Examples include Uniswap (UNI) and PancakeSwap (CAKE).
How to build a balanced crypto portfolio
When it comes to building a well balanced crypto portfolio there are plenty of different schools of thought.
These are our top recommendations, however, we encourage you to do your own research and ultimately go with what feels right.
- Diversify Risk
Ensure your crypto portfolio has an adequate amount of risk tolerance by incorporating high, medium and low-risk coin options, portioned appropriately.
It’s important to first establish what level of risk you are willing to take, and plan your portfolio accordingly.
- Include Stablecoins
While these aren’t associated with wild gains, stablecoins help to provide your portfolio with liquidity and are key to many DeFi dapps.
They also allow traders to quickly and easily exit a position or lock in gains whether in a bear market or a bull market.
- Monitor The Market
Ensure that you are checking in to see what is happening in the market regularly and adjusting your well balanced crypto portfolio to best manage this.
Crypto markets can still be very volatile, so ensure that your trading decisions reflect what is happening.
- Monitor Your Emotions
This might be one of the biggest overseen aspects of trading but ensure that you have a grip on your emotions as they can play an integral part in your decision making.
Fear and greed are strong contenders when it comes to making logical trading decisions, make sure that these are not influencing any of your trades.
Don't let greed interfere, changing potential big gains to huge losses. Things can go terribly wrong when emotions are behind the wheel of trading decisions.
- DYOR
We cannot stress it enough - always do your own research when exploring engaging with other cryptocurrencies. Never engage in a project that you cannot fully explain to another trader. Crypto involvement requires a substantial amount of due diligence.
While there is value in taking advice from a strong trader, ensure that you do your own vetting of the project before blindly trusting a stranger, this is your own money after all.
- Onlycommit what you’re willing to lose
As a golden rule of thumb when it comes to allocating funds, only allocate what you're willing to lose.
If you’ve made trading decisions that are causing you sleepless nights, consider a different approach, and ensure that should something go wrong that you have the financial means to stay standing. Your overall portfolio should be correctly balanced in order to ensure you can have rest-filled nights.
How to use a portfolio tracker
While typically used for short-term and day traders, trackers can also provide value to long term investors. Trackers provide a reliable way of monitoring the performance of your low, medium and high risk assets.
Crypto trackers also allow investors to measure their results across several blockchains and wallets in real-time, allowing one to directly measure the success or losses of their crypto holdings.
Portfolios typically involve holding multiple coins across various blockchains, so finding a compatible and suitable portfolio tracker makes sense.
First, you’ll need to select a good portfolio tracker that best suits your needs. Below we’ve outlined the top crypto portfolio trackers, although it's best to get a feel for the platform before diving in.
For instance, Pionex is better suited to high volume investors while Delta is better suited to beginners. See our selection below of top options on the market at the moment.
- CoinMarketCap
One of the most used sources of information in the crypto space, CoinMarketCap also provides tracking functionality. Users can enter their coins, what price they were bought at and monitor their progress. - Pionex
Favoured to high volume investors, Pionex provides a more advanced option when it comes to tracking your crypto portfolio. - CoinGecko
Most commonly known as being a data aggregator, CoinGecko also allows users to track over 1,000 coins across its mobile and desktop crypto trackers. - Delta
Delta not only provides a very user-friendly crypto tracker, it also allows users to track a wide range of assets including fiat currencies, stocks, bonds, futures, and ETFs.
Aside from the look and feel, other factors to consider are safety and security, and whether it supports the wallet and coins in which you've allocated resources.
Building your crypto portfolio manually
When you’re ready to start building your well-balanced crypto portfolio, you will need to find a reliable platform and wallet on which to do so.
Ensure you stick to a regulated exchange and that the security behind the wallet you choose is of high standards.
Tap mobile app offers a secure and convenient platform through which users can buy, sell, trade and store a wide range of cryptocurrencies. Learn more here on our website available on both desktop and mobile devices.
Next, you will need to decide on which coins you'd like to engage with, ensuring that you strategically distribute your capital with appropriate weightings.
Take cues from our Types of Cryptocurrencies above, deciding on how you wish to allocate the coins in order to build a balanced crypto portfolio.
We encourage you to conduct extensive research in this phase: A golden rule of engaging with cryptocurrency is to comprehend what crypto is before allocating any funds to it, as well as to understand each individual coin.
La question revient sans cesse : quand sera miné le tout dernier Bitcoin ?
On s’est tous posé la question à un moment ou un autre, alors on a décidé de faire le point. Spoiler alert : ce n’est pas pour tout de suite.
Mais avant d’entrer dans le vif du sujet, il faut d’abord comprendre deux éléments clés : l’offre totale de Bitcoin et le mécanisme de halving (ou réduction des récompenses). Allez, on embarque ?
L’offre totale de Bitcoin
Quand le Bitcoin est apparu dans un whitepaper en 2008, le monde découvrait une nouvelle façon de concevoir la monnaie. Contrairement aux devises classiques gérées par des banques centrales, le Bitcoin repose sur un système décentralisé sans aucun intermédiaire.
En réponse à la crise financière de 2007-2009, son mystérieux créateur Satoshi Nakamoto a intégré un principe fort : il n’y aura jamais plus de 21 millions de BTC en circulation. Un choix qui rend le Bitcoin naturellement déflationniste, à l’inverse des monnaies traditionnelles que l’on peut imprimer à volonté.
En mai 2021, environ 18,7 millions de BTC avaient déjà été minés, soit près de 89 % de l’offre totale. Mais ne vous laissez pas tromper : le chemin est encore long avant d’atteindre les 100 %.
Le halving : un mécanisme bien pensé
Autre astuce géniale intégrée au protocole : le halving.
Tous les 210 000 blocs minés (environ tous les 4 ans), la récompense des mineurs est divisée par deux.
Petit rappel : les mineurs sont les personnes (ou machines) qui vérifient les transactions sur la blockchain. Pour chaque bloc validé, ils reçoivent une récompense en BTC. En 2009, cette récompense était de 50 BTC. Douze ans plus tard, elle est passée à 6,25 BTC… et continue de baisser.
Ce système permet de ralentir l’arrivée de nouveaux Bitcoins en circulation. Là où les banques peuvent injecter des masses d’argent (comme pendant la pandémie de Covid-19), le Bitcoin limite volontairement l’émission de sa monnaie. Résultat : un actif rare, potentiellement de plus en plus précieux.
Alors, c’est pour quand le dernier Bitcoin ?
Maintenant que vous avez les bases, passons à la fameuse question : combien de temps avant que tous les Bitcoins soient minés ?
La prochaine réduction de la récompense est prévue pour 2024, où elle passera à 3,125 BTC par bloc. Ensuite, on aura des halvings en 2028, 2032, etc. En 2032, plus de 99 % des BTC auront été extraits.
Mais cette dernière portion, si petite soit-elle, prendra du temps… beaucoup de temps.
À cause du halving, les récompenses deviennent minuscules au fil des décennies. Résultat ? Le tout dernier Bitcoin devrait être miné en… 2140.
Oui, vous avez bien lu. Encore plus d’un siècle à attendre. Autrement dit, nous ne serons sûrement plus là pour le voir.
Et après ?
Le Bitcoin est passé de quelques centimes à plusieurs dizaines de milliers de dollars en un peu plus de dix ans. Ce que l’avenir réserve est encore flou, mais une chose est sûre : le processus de minage, lui, est clair et défini.
Si vous souhaitez découvrir ou utiliser Bitcoin dès maintenant, l’appli Tap permet de l’acheter, le vendre, le stocker et même de le dépenser facilement.
Vous vous demandez quand le dernier Bitcoin sera miné ? Peut-être que c’est le moment de taper dans l’avenir.
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