When you’re first getting started with investing in cryptocurrency, one of the terms you’ll come across is “portfolio balance.” But what does that mean?
Essentially, your portfolio balance is the value of all the assets in your Coinbase account, minus any outstanding debts or liabilities. So, if you have $1,000 worth of Bitcoin in your account, and you owe $100 to someone in Bitcoin, your portfolio balance would be $900.
Your portfolio balance can fluctuate day-to-day as the prices of the assets in your account change. So, if the price of Bitcoin goes up by 10%, your portfolio balance will increase by 10%.
Similarly, if the price of Bitcoin goes down by 10%, your portfolio balance will decrease by 10%.
One reason why people care about their portfolio balance is because it can give them an idea of how their investments are performing. If the value of your assets goes up, that means your investments are doing well.
On the other hand, if the value of your assets goes down, that means your investments are not doing as well as you’d like.
Another reason why people care about their portfolio balance is because it can help them make decisions about when to buy or sell assets. For example, let’s say you have $1,000 worth of Bitcoin in your Coinbase account and the price of Bitcoin goes up to $2,000. You might want to sell some of your Bitcoin so you can take profits.
Alternatively, let’s say the price of Bitcoin falls to $500. You might want to buy more Bitcoin so you can average down on your investment.
Ultimately, whether or not you care about your portfolio balance is up to you. Some people prefer to focus on the individual prices of the assets they own and don’t worry too much about the overall value of their account.
Others prefer to keep a close eye on their portfolio balance so they can make sure their investments are on track.
No matter what approach you take, understanding what portfolio balance means is an important part of being a successful investor in cryptocurrency.