• Mon. Jul 22nd, 2024

Long-Term and Short-Term Crypto Trading: How a Core-Satellite Can Support It

 

Among stock traders, the use of a core satellite has been commonplace for decades. This strategy focuses on having a major chunk in long-term and diversified stocks or funds, combined with different clusters of short-term to mid-term investments. These clusters can be high-risk investments, which you can swap on a more frequent basis.


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The goal is to have a clear strategy per satellite for it to work. Naturally, the satellites should outperform the core.  In this article, we will look at how a crypto tracker can support you in maintaining this strategy in the crypto space.

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Setting up a core-satellite crypto portfolio

When you want to set up the core and satellite, you need to settle on a strong core. When it comes to crypto, there are limited options unless you have a high-risk appetite. For example, key contestants for the core are coins like Bitcoin and Ethereum. Once you have settled on a core, you can determine your periodic investment. For example, you can Dollar Cost Average (DCA) by doing a weekly investment of 50 dollars.

 


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Satellites require more attention

In the crypto space, a lot changes every day. This also requires you to pay more attention to the satellites. Once you have selected them, you still need to stay on top of things. A good example is the rise of Non-Fungible Tokens (NFTs). This is a vibrant market but also requires you to pay attention to the changes as your assets can appreciate (and depreciate) quite fast.

Analytics on your trades

A crypto tracker allows you to perform analytics on the trades you performed. Through APIs, they can connect to all major brokers to retrieve transactions. This can help you to validate if you are on track with your strategy, and that your trades live up to the expectations.

Clusters in your crypto tracker

Trackers also enable you to see if your strategy works in practice. For example, you can create portfolios where you place your holdings. You can create a portfolio for the core, while you can create them for each satellite. Once in place, you can track the performance and conduct a benchmark to see how they perform.

NFTs are also available

Trackers such as Delta.app also offer you the possibility to track your NFT holdings. This happens by directly connecting with wallets such as MetaMask through APIs. This is the same connection used for connecting to other exchanges. You can then load your connections into the app and see the real-time value. At the same time, you can also browse through other collections.

 

Why satellites should always outperform the core

If you want to properly execute a core-satellite strategy, you need to make sure that the satellites outperform. The reason is clear: you need to outperform because you do more research. You need to read more whitepapers actively, background check the coins or NFTs, and also read what the community thinks about it. If you settle for a long-term investment such as Ethereum, less research is needed.


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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.