Should Crypto Be Part of Your Net Worth?

The Short Answer

Yes, if you own crypto, it should absolutely be included in your net worth calculation. It is an asset with real market value, regardless of how you feel about its long-term prospects.

The more interesting question is: how much of your portfolio should be in crypto?

Position Sizing

Most financial advisors who are open to crypto suggest keeping it between 1-5% of your total portfolio. More aggressive investors go up to 10%. Beyond that, you are making a concentrated bet on a single asset class.

Here is how to think about it:

• 1-2%: You want exposure without meaningful risk to your net worth
• 3-5%: You believe in the long-term thesis and can stomach 50%+ drawdowns
• 5-10%: You have high conviction and a long time horizon
• 10%+: You are speculating, not investing. Be honest with yourself.

Tracking Crypto in Your Net Worth

The challenge with crypto is volatility. Your net worth can swing 5-10% in a day if crypto is a large portion. A few approaches:

Track at current market value. This is the most accurate but can be emotionally draining if you check daily. Use it for monthly or quarterly snapshots.

Track at cost basis. Record what you paid, not what it is worth today. This removes emotion but gives you a less accurate picture.

Use a blended approach. Track at market value but take snapshots monthly, not daily. This gives you accuracy without the constant noise.

Which Cryptos to Include

Include everything you can actually sell:

• Bitcoin and Ethereum on exchanges
• Tokens in DeFi protocols (if you can withdraw them)
• NFTs (at floor price, not what you hope they are worth)
• Staked assets (include them, note the unlock period)

Do not include:

• Airdrops you have not claimed
• Tokens with no liquidity
• Anything you cannot convert to cash within a week

The Volatility Question

If a 50% drop in your crypto holdings would cause financial stress, you own too much. The right amount of crypto is the amount where you can watch it drop by half and still sleep well.

This is different for everyone. A 25-year-old with no dependents and a stable job can tolerate more risk than a 50-year-old approaching retirement.

Bottom Line

Track your crypto as part of your net worth, but do not let it dominate your financial picture. The goal of tracking net worth is to make better decisions. If crypto volatility is making you anxious, reduce your position until it does not.