Hoptrail’s research shows that around 95 percent of crypto investors trade more than one asset. A slightly lower number – approximately 90 percent – trade across multiple exchanges.
Things very quickly get complicated.
You’ve traded far more than you thought!**
We now live in a multi-asset, multi-venue, multi-chain world. What this means is that crypto portfolios are increasingly complex. One recent audit completed by Hoptrail featured 25 trading venues – which do not include non-custodial wallet services – and more than 150 deposit addresses across almost 50 crypto-assets.
The complexity in piecing together trading history is often too overwhelming for the investor (you’ve traded far more than you think!); and almost certainly too challenging for a potential counterparty. That being said, blockchain data is extremely useful in deciphering the story of a portfolio.
Keep track of your data!**
- ain Assets: usually an investor has one particular asset from which most of their gains flow. The ability to identify when and where those assets were acquired and stored is essential to establish source of wealth. This allows us to chart the performance of that asset during the holding period, and assess the approximate gains based on the holding during that time.
- Cash Out: Liquidations usually occur on one or two exchange venues. The route leading up to those sales is important. That means showing which assets were sold, and where they came from. Part of our analysis involves assessing whether the final amount matches with the appreciation of assets held over the investment cycle.
Knowing what data is important will allow the transition from digital to ‘real’ to be far smoother, regardless of complexity.