Behind every successful crypto trader, there is a neatly organized archive of all executed trades and cryptocurrency investments. Keeping track of the entire trade history is important not only for tax purposes but also for having an accurate reminder of your professional development.
If you try to catch up with all new-coming trends in the crypto industry, this can be a bit overwhelming, especially now that the blockchain has carved out an entire world for itself. What we call crypto trading today is more than just buy-and-sell Bitcoin. That’s why it’s a real mastery to handle all that variety of smart tokens, growing altcoins, and NFTs into a single portfolio. For beginners, the hard part is how to start implementing portfolio management tools.
Moreover, in this volatile landscape, you can’t keep track of your trading portfolio without a trustworthy cryptocurrency exchange, a reliable source for updates, and ultimately, a robust portfolio tracker (when the time comes). But, no worries! In this article, we’ll cover them all.
What Is a Cryptocurrency Portfolio?
The term cryptocurrency portfolio stands for all tokens and coins in your possession. It represents you as an investor across all crypto markets. For instance, if you own 5 different types of crypto, then we say that your portfolio consists of 5 cryptocurrencies. The current market value of all the digital currencies residing in your portfolio equals your total portfolio worth.
Once you start diving deeper into the world of crypto, it’ll be expected from you to diversify your portfolio. After a while, you may come to a certain point where it becomes difficult to keep track of all your trading activities. That is the unmistakable signal to download a piece of software or a mobile app specifically designed to provide a real-time display of your performance as a crypto trader. These programs are called portfolio trackers.
The interchangeable use of crypto portfolio and portfolio tracker is a common misconception in the asset-management jargon. Your portfolio represents you, regardless of the format — it may be a simple Excel sheet or a sophisticated app. Hence, portfolio trackers are only one possible option to represent your portfolio.
Finally, your portfolio should be as diverse as you feel it should be. There are plenty of examples of successful traders that stick to a single or a few coins and make the best of it (them).
Why Do You Need Cryptocurrency Portfolio Tracker for Your Bitcoin?
There are multiple reasons for a well-organized crypto portfolio — some of them arise from the need for the development of a personal trading strategy, while others are conditioned by local regulatory norms.
Balance Gains and Losses
Primarily, you keep track of your crypto transactions to monitor your gains and losses over a certain period of time. When you have clear insight into these numbers (categorized by size or chronological order), you’ll be able to draw a clear line between your wrong and right movements. As such, you’ll know the exact amount of profit and loss you’ve achieved.
The difference in buying and selling prices translated in numbers and charts will always be here to remind you of possible position changes, even though you strongly believe the opposite. For example, in a situation when you keep investing in a cryptocurrency that goes downfall for a longer period but you still hope for a miraculous bullish movement. So, numbers are here to tell you that even if its price eventually booms, it won’t be enough to cover the series of negative outcomes in the past.
The opposite scenario is also possible. If you’ve made multiple BTC purchases in a single month, it’ll be nearly impossible to memorize them all or to go from one wallet/exchange account to another to check when the buying price was the most favourable and whether it’s the right time for selling.
Tax Regulations
Despite the decentralized nature of the blockchain, trading cryptocurrency usually takes place in a regulated marketplace. Governments came a bit late in this picture — when the power of digital assets started re-shaping the global financial system. However, they managed in a relatively short time to establish some legal norms in the crypto industry.
In Canada, Bitcoin and other digital assets are treated as commodities and hence, subject to either Capital Gain Tax or Income Tax — depending on the type of profit you’ve realized throughout the year. Yes, you need to report your crypto holdings only if you make a profit out of them. Keeping Bitcoin inactive in your crypto wallet doesn’t make it a taxable event.
For that reason, you must know the exact amount of your annual profits. To support the numbers, you’ll have to submit a bunch of documentation, including but not limited to transaction time and size, description, receipts of executed purchases and sales in or with crypto, your transaction cost basis, a wallet-address list of your trading counterparts, etc.
Collecting all documents can be burdensome even if you keep meticulous documentation of your executed trades. But without clear records, it will be impossible to gather them all in one place.
Finally, looking for professional assistance is very common for reporting crypto taxes but at the end of the day, you must personally deliver the records to the tax expert or the audit firm.
Access to Different Markets
Relying on a crypto tracker can be useful even for a low-key portfolio as it gives you insight into various crypto exchanges. Cryptocurrencies don’t have a treasury department to set a unified exchange rate. For example, Bitcoin can sell $40,150 on Coinbase, $40,130 on Binance, and 40,170 on Kraken. This is rather a substantial price gap and can affect the outcome, especially if you buy a large amount.
However, it’s impossible to monitor all favourable offers across different exchanges manually. On the other hand, the majority of portfolio trackers use the API of multiple exchanges and display price differences in real-time. Crypto tracking programs also deliver a range of data analysis charts, enabling you to observe the market trends and base your next move on facts rather than emotions.
Best Cryptocurrency Portfolio Tracking Programs
As we already implied, crypto trackers become necessary as you grow as a trader or use several exchange platforms. A reliable tracker is essential when levitating around the DeFi sphere and AMM protocols such as Uniswap and Pancakeswap, earning interest on your crypto holdings through staking and lending, participating in ICO events or using crypto debit and credit cards like the one provided by Crypto.com.
We’ve listed a few popular management solutions for your cryptocurrencies, but ultimately, the choice for the most suitable one should be on par with your trading style. Hopefully, our selection will help you narrow down the list.
CoinTracker
In 2017, Jon Lerner and Chandan Lodha introduced a multi-functional app for cryptocurrency management that became a leading portfolio tracker and tax software calculator among the growing crypto community. They claim to keep track of 3% of the total number of circulating cryptocurrencies.
CoinTracker features a user-friendly interface and an all-in-one dashboard from which you can access a multitude of functionalities. The dashboard itself displays information about price, historical data, market cap, chart predictions and other info about the coins and tokens you own, as well as the overall performance of your portfolio.
CoinTracker supports over 10,000 crypto assets, including the likes of Bitcoin and other popular altcoins such as Bitcoin Cash (BCH), Ethereum (ETH), Binance Coin (BNB), and XRR. It’s equally welcoming to stablecoins and DeFi tokens.
In addition, CoinTracker integrates with the leading exchanges and wallets with data from Nomics and other APIs. The list of exchanges includes Coinbase, as an official CoinTracker partner, as well as Binance, KuCoin, Bitfinex, Kraken, and many more. You can also pair the platform or the mobile CoinTracker app with well-established hardware wallets like Ledger and Trezor or one of the many software storage solutions like MetaMask, Trust Wallet, or Exodus.
Before listing CoinTracker’s main traits, let’s mention that the tracker is very good at reading CSV import files and comes with a free account (up to 200 trades) and a pro-account upgrade for an unlimited number of trades and more advanced features.
The setup process is pretty upfront — pair the tracker with your exchange account or wallet, review the import data and get customized portfolio insights and market exposure, and tax calculator.
CoinTracker Features
The popularity of this tracking platform lies in the number of options to make you more comfortable while trading crypto:
- Wallet tracking and auto wallet synchronization;
- Tax return generator adjusted to your native regulatory framework and seamless integration with TurboTax;
- Built-in Cost Basis Methods;
- Fee tracker;
- Performance evaluator;
- Trade reports.
CoinTracking
Although very similar in name and features, CoinTracking is a crypto portfolio tracker with a more experience on the scene compared to CoinTracker. It’s another state-of-the-art tracking tool launched in the early Bitcoin era.
Similar to Cointracker, you can access Cointracking through a web platform, but you can also rely on its highly functional mobile app, available on both Android and iOS devices. Moreover, this crypto tracker also offers an intuitive interface where you can easily approach all information related to your cryptocurrencies. The integration with external wallets and crypto exchanges is at the same high level as CointTracker with a focus on preparing accurate tax documentation.
Over the years, Cointracking gained an impressive user base scattered around the world. Apart from the exhaustive list of services, the tracker is appreciated in the community because of the robust security measure it applies:
- 2FA (two-factor authentication;
- Data encryption;
- Backup options;
- No need for access to the exchange you use.
Finally, CoinTracking allows you to choose how to import your documents. You can enter the trades manually, import them into the app via CSV or directly via API importer.
Koinly
Established in 2018, Koinly is another big player in the crypto management industry. It operates similar to other crypto trackers offering you to automatically import and monitor your crypto transactions. All you need is to create an account and synchronize your wallets and crypto exchanges, so the software can prepare for the upcoming tax season by using its built-in features adjusted to different legislations worldwide.
Once you get to register on the Koinly platform, you’ll immediately notice the neat design of the dashboard. It provides a handy overview of your total portfolio value, number of transactions, performance by crypto, and your fiat-currency balance across different crypto exchanges. Just like the previous two crypto trackers, Kionly features a strong network of over 350 supported wallets and exchanges.
On Koinly, there is a separate Tax Reports tab that delivers a detailed overview of all your crypto activities for a given year. The great thing about Koinly is that its software can automatically identify the type of transaction as you import it. For instance, it can “spot” futures and margin trading as well as staking and lending activities from platforms like Celsius and YouHodler.
The tracker also has an error reconciliation option that uncovers incomplete transaction data and signals inaccurate data import. The Tax Report option can process nearly all activities available in the crypto industry:
- Capital gains and losses when buying and selling crypto;
- Gains from derivatives and futures;
- Regular income from forks, airdrops, and saving accounts;
- Donations and crypto gifts.
Not to forget that you can start with Koinly for free and gradually upgrade your account depending on your needs. There are three packages Newbie, HODLer, and Trader. Tax services don’t come with the free package and you get email support only with the Trader account, which costs around 180 USD per year.
A Few Words Before You Go…
What we’ve concluded so far is that crypto tracker packages aren’t an obligatory tool in your crypto trading career. Yet, they can be extremely useful in the process of diversifying your portfolio, helping you sail through the abrupt volatility in the crypto market and price inconsistency across various exchanges.
However, now that governments have tightened cryptocurrency tax regulations, such tracking software solutions are becoming strictly necessary since the majority of them have built-in tax calculators with sleek mechanisms for importing external documentation. Moreover, crypto laws have still been in a developing phase, and not many auditing experts have mastered the field of calculating crypto gains and losses. So, in this landscape, automated programs are certainly a safer and cheaper method. Finally, crypto tracking tools are very flexible in their pricing system, offering several membership plans based on your needs and trade size.
All in all, having a trustworthy crypto tracking tool beside you is always a good idea. It gives a professional touch to your personal crypto endeavour and calming note to your FOMO voice real-time price alerts and market notifications.