Cryptocurrencies remain some of the hottest assets on the market, and that’s unlikely to change. They are one of the most discussed, most volatile, most sought-after and (in some cases) most valuable asset classes. Countless pixels have been spilled on the legal and tax status of crypto assets alone. People have made fortunes and many, many more people have lost their investments entirely. That doesn’t mean you should stay away, but if you want to jump into cryptocurrency trading you should make sure to equip yourself with the right information and tools. Here are five apps that should help.
Figuring out how much – if any – of your portfolio should include crypto assets is challenging. A financial advisor can help you assess your choices.
Great for Trading: Coinbase
Ordinarily this writer strongly argues against app-based trading. The gamification of investing has not done anyone any favors. Cryptocurrency, however, is a little bit different. This is an asset class marked by its extreme volatility, such that many traders would be well served to have the tools for quick day trading in their pocket. And if you’re going to hold a cryptocurrency trading app in your pocket, then Coinbase is the one to choose.
Why: Quick access to trading, which can be very useful for an extremely volatile asset class.
Pros: Coinbase is one of the most highly rated cryptocurrency exchanges out there, and their app is well designed for doing light research and executing trades.
Cons: While very well regarded, Coinbase is more expensive than many competing exchanges, and the app’s emphasis on ease of use makes it harder to do more sophisticated research.
Great for Wallets: Ledger
A crypto wallet is how you store your cryptocurrency keys. These can be as elaborate as encrypted pieces of dedicated hardware or as simple as a piece of paper stuck inside your literal wallet. Ultimately the point of this service is to store the long alphanumeric string that secures access to each of your crypto tokens.
Cryptocurrency traders debate the relative merits storing your keys offline (“cold storage”) vs online (“hot storage”). While cold storage offers far more security, hot storage offers significantly better access. This is an extreme simplification of the debate, but fortunately Ledger allows you to skip the issue entirely. With Ledger’s app you can track and monitor your cryptocurrency keys, while you can also pair it with the company’s very well regarded hardware options for more secure cold storage.
Why: Track and access your cryptocurrency keys with your phone, anywhere any time.
Pros: One of the most well-respected names in the wallet and storage business, Ledger offers hardware based storage solutions that pair with the company’s software to let you access those keys online.
Cons: Ledger can be quite expensive.
Great for Spending: Gemini
Gemini, named after a well-known constellation, is steadily becoming a well-known part of the crypto world. The platform offers a trading exchange, banking products with interest and even lending through its Gemini credit card. Readers who are interested in cryptocurrency as a currency, not just an investment asset, should check out all of these products. (Although readers interested in crypto as a currency should also be extremely careful about the volatility of this asset class.)
For our purposes, the Gemini app is particularly useful as a spending tool. Its QR-based software makes it easier than just about ever before to actually spend cryptocurrency on products and services in the real world. If you want to buy a cup of coffee (or a car) with Bitcoin, this might be the app for you.
Why: Spending cryptocurrency can be a very real challenge. This app makes it much easier to actually use your crypto as a currency.
Pros: Spending crypto by just scanning a QR code on the Gemini app is as easy as using any mobile wallet on the market.
Cons: Relatively few businesses still accept cryptocurrency in exchange for goods and services, and you will still have to deal with lengthy transaction times due to the nature of crypto itself.
Great for Research: Coin Metrics
Investors who want to do research into the crypto market will have an embarrassment of riches. There are hundreds, if not thousands, of websites dedicated to tracking and analyzing the cryptocurrency market.
Among these, Coin Metrics stands out. They not only offer an enormous and robust set of data, but do so in a way that is clean and relatively accessible to the average user. Their data isn’t always the easiest to wade through, but in part that’s the nature of the product. At a certain point access and sophistication conflict, Coin Metrics errs on the side of giving you more data. But for users who want to learn as much as possible during their morning commute, the Coin Metrics app is a winner.
Why: Research the market and your options before making a trade, or obsessively re-research the market after sending in your orders.
Pros: A wealth of information and a well designed interface make this a great product.
Cons: That well designed interface can only go so far, and Coin Metrics can be fairly dense and hard to use at times.
Great for Tracking: Blockfolio
Portfolio tracking can be an essential way of weeding through market data.
A tracking app is one which doesn’t just track the crypto market at large (although many do offer this feature). Instead it specializes in tracking the contents of your portfolio. You pull it up, see what you own and how each of those products is doing. While this seems simple, it can actually be an enormously valuable product in a market as volatile as cryptocurrency. This is an at-a-glance product, and Blockfolio offers a particularly good one. Natively designed for smartphones, this app is clean, thorough and provides you with exactly the information you need. It’s a near-must for serious crypto traders.
Why: Always-on access to information about your cryptocurrency portfolio and how it’s doing.
Pros: Blockfolio has a great design that was built for smartphones from the ground up and it supports just about every currency on the market at time of writing.
Cons: While it connects to the biggest exchanges, if you use a smaller exchange Blockfolio may not work for you, and its price alerts don’t work for every type of crypto asset.
The Bottom Line
Like any form of investment, crypto traders will do better if they have the right tools. For access to active trading, we recommend Coinbase’s app, while Blockfolio is particularly good at keeping track of that portfolio. In-depth research is well handled by Coin Metrics, and Ledger has built a terrific wallet. And if you want to spend all of these tokens, Gemini may be the app for you.
Tips on Investing
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Volatility can be scary, but it isn’t always a bad thing. In fact, it can be very good, as volatility means that an asset can rise as much as fall. The key is to make sure that you balance these speculative assets well in your overall portfolio, and that’s where a good financial advisor can be invaluable. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor, get started now.
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Because the IRS categorizes cryptocurrency as property, you may owe capital gains taxes. SmartAsset’s free capital gains calculator could help you figure out how much you owe.
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If you lost money on Bitcoin or other cryptoassets, a financial advisor can also help you deduct your capital gains losses. Learn more about tax-loss harvesting.
Photo credit: ©iStock.com/alengo, ©iStock.com/Alexandr Yurtchenko, ©iStock.com/Clerkenwell
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