Why has my cryptocurrency portfolio decreased? A different perspective.

I've noticed when most people look at their cryptocurrency portfolios they view the price value of their Ethereum, Bitcoin and other altcoins mainly in US dollars. The fact that they are viewing the USD prices skews their perception of the value of their portfolio.

Let's say you hold $100,000 US dollars worth of Bitcoin, Ethereum and Ripple. You check the price everyday and think the price is fluctuating rapidly between $80,000 to $120,000. By viewing the price of cryptocurrency this way you're not viewing it in the perspective of most traders. The reason behind this is the fact that most exchanges trade via Bitcoin prices rather than US dollar prices.

Instead if you compare the price volatility of the price in Bitcoin, you'll find that the amount of cryptocurrency you hold fluctuates differently to the US dollar amount. This is important as by viewing the price in Bitcoins you're viewing the price of the other coins you hold(whether it be Ethereum, Ripple or any other) in the currency they are typically traded with. The exception to this rule being the fact that Ethereum itself is used to solely facilitate trading amongst decentralised exchanges and the price of it's native tokens(e.g Status, OmiseGo etc) are measured in Ether prices.

A point to consider is the fact that Bitcoin prices rising and dropping currently affects the entire market. You'll notice if the Bitcoin price rises 10%, the entire market increases in price. However this rule is not set in stone as prices are subject to speculation and other factors within the market as previously when Bitcoin price rose, alt-coin price's dipped. The market is always changing.

Example of a portfolio measured in Bitcoin, courtesy of the Blockfolio app.

So to recap, measuring your cryptocurrency portfolio solely by the US dollar amount will give you a skewed perspective of how your investments are holding up within the market. Cryptocurrency is still a young market and things change rapidly so it's important to adjust your perspective when viewing your own portfolio.

I'm curious to hear what other people think, so leave a comment below if you have a differing idea or perspective on how you view cryptocurrency prices. Thanks for reading. I'm a regular contributor to steemit and post mainly about cryptocurrencies, follow me if you'd like to read more of my upcoming articles.