Quick Summary
A guide to tracking crypto and alternative investments in net worth - covering valuation methods, volatility handling, and integration with overall financial tracking.
Cryptocurrency, collectibles, precious metals, and other alternative investments complicate net worth tracking. They’re assets, but with unique challenges: high volatility, valuation difficulty, and liquidity questions.
Customizable tracking: The Net Worth Tracker can include an “Alternative Investments” section for crypto, metals, and collectibles.
Here’s how to include them appropriately.
What Counts as Alternative Investments
The term “alternative investments” covers a wide range of assets that fall outside traditional stocks, bonds, and cash. Understanding what belongs in this category helps you decide what to track and how.
Cryptocurrency includes Bitcoin, Ethereum, and other coins, along with DeFi holdings and NFTs (with caveats about valuation). Precious metals cover gold coins and bars, silver, and platinum. Collectibles span art, wine collections, sports memorabilia, vintage items, and trading cards. Other alternatives include private equity stakes, venture investments, crowdfunded investments, and peer-to-peer lending.
What ties these together is that they share characteristics that make them different from traditional investments: they often lack daily price quotes, can be difficult to sell quickly, and may require specialized knowledge to value accurately. Some people hold significant wealth in these categories, making accurate tracking essential for a complete financial picture.
The Core Question: Include or Not?
This question comes up constantly in personal finance discussions. The answer depends on what you’re trying to accomplish with your net worth tracking.
Arguments for including alternative investments: they have market value, you could sell them, excluding them understates your actual net worth, and they’re part of your complete financial picture. If you own something worth money, it belongs in a comprehensive net worth calculation.
Arguments against: they’re highly volatile, hard to value accurately, illiquid (can’t easily convert to cash), and values may be speculative. A net worth figure that swings wildly based on crypto prices might feel less useful than one focused on stable assets.
The middle ground that works for many people: include them, but with appropriate treatment. Track separately from liquid assets. Use conservative valuations rather than optimistic ones. Note the volatility and illiquidity in your tracking. This gives you the complete picture while acknowledging that alternative assets behave differently from traditional ones.
Cryptocurrency Tracking
Crypto presents unique tracking challenges because prices change constantly and the infrastructure for tracking differs from traditional investments. Most people find a balance between accuracy and effort.
For getting current values, manual lookup through sites like CoinMarketCap, CoinGecko, or your exchange balances works fine for monthly updates. In Google Sheets, the GOOGLEFINANCE function doesn’t reliably support crypto, so most people use manual entry, third-party add-ons, or API connections if they want automation (that last option requires more technical setup).
What to Track
A simple tracking table works well for most crypto holdings:
| Holding | Quantity | Price | Value |
|---|---|---|---|
| Bitcoin | 0.5 | $65,000 | $32,500 |
| Ethereum | 3.2 | $3,200 | $10,240 |
| Total Crypto | $42,740 |
For update frequency, two approaches work well. Monthly average reduces the impact of daily volatility - use the average price on your update day. Month-end snapshot is simpler and more consistent, though it may catch highs or lows depending on market timing. Either approach works; consistency matters more than which method you choose.
Crypto can swing 20-50% in weeks, which creates tracking challenges. Some people use a conservative approach - recording 80% of current value in their net worth calculation to account for this volatility. Others track crypto net worth separately from traditional net worth, showing both figures. A third option is using a 30-day moving average price instead of spot price. The right approach depends on how large crypto is as a percentage of your total net worth and how much the volatility bothers you psychologically.
Precious Metals Tracking
Precious metals are easier to value than crypto because established markets provide consistent pricing. Gold, silver, and platinum all have spot prices that are easy to look up and relatively stable compared to cryptocurrency.
For example, if you hold 5 oz of gold coins and the spot price is $2,000/oz, the value is $10,000. Simple multiplication. The challenge comes in understanding that spot price isn’t exactly what you’d receive if you sold.
A few considerations worth noting: you can’t always sell at spot price, so expect 3-8% below spot when selling physical metals. There’s also a difference between physical storage (coins and bars you hold) versus paper gold (ETFs and futures), which have different liquidity characteristics. And some coins carry a collectible premium worth more than their metal content alone.
For net worth tracking, a conservative approach uses this formula: Value = Spot Price times Ounces times 0.95. That 5% discount accounts for selling costs and gives you a more realistic picture of what you’d actually receive.
Collectibles Tracking
Collectibles present the hardest valuation challenge among alternative investments. No ticker symbol exists. Value depends on condition, market demand, and finding the right buyer at the right time.
Several valuation methods exist, each with tradeoffs. Recent sale of an identical item is the best indicator when available - check eBay sold listings and auction results for comparable sales. Professional appraisal works for significant items but costs money. Insurance value is what you insure items for, but this is often inflated since it’s meant for replacement cost. Purchase price provides a conservative baseline but may not reflect current market conditions.
For most people tracking net worth, conservative estimates make the most sense. Items under $1,000 either don’t include in your calculation or use 50% of purchase price. For significant items, consider getting a professional appraisal and then using 70-80% of that appraised value in your net worth calculation.
Unlike securities, collectibles don’t need frequent updates. Annual valuation works fine since these markets move slowly. Tracking quarterly or monthly adds effort without adding much accuracy.
NFTs
NFTs deserve separate treatment because they combine the worst tracking challenges: extreme volatility, illiquidity (finding buyers can take months), speculative valuations with little price history, and the reality that many NFTs become worthless over time.
Three approaches to handling NFTs in net worth tracking: Option one is to not include them at all, which is the most conservative approach. Option two is to include them at the floor price of the collection if it’s established and actively traded. Option three is to include them at purchase price until sold, recognizing no gains or losses until they’re realized.
Unless NFTs represent a significant portion of your wealth and you actively trade them, the simplest approach is excluding them from net worth tracking entirely. The effort required to value them accurately rarely provides enough insight to justify the time spent.
Private and Illiquid Investments
Private investments add another layer of complexity because there’s often no market to establish current value. These assets require different valuation approaches than publicly traded securities.
For private equity or venture stakes in private companies, two approaches work: use the last funding round valuation for your shares, which gives you a data point even if it’s stale, or use your investment cost until there’s an exit event. Either way, recognize that these holdings are highly illiquid and the valuation is an estimate at best.
Crowdfunded investments follow similar logic. Track them at your investment amount until there’s an event like an exit or failure. Many crowdfunded investments fail entirely, so counting unrealized gains overstates your actual position. Conservative treatment serves you better here.
P2P lending works differently because the principal amount is more concrete. Track the principal outstanding, then apply a discount for expected defaults, typically 5-10% depending on the platform and loan grades you’ve invested in. This gives you a more realistic picture than the stated portfolio value.
Organizing in Your Tracker
The most useful approach separates alternative investments from traditional assets in your tracking. This gives you both the complete picture and the breakdown by asset type.
A separate section approach works well. Track traditional assets first - checking, investments, home equity - with their own subtotal. Then track alternative assets - cryptocurrency, precious metals, collectibles - with a separate subtotal. Sum both for your total net worth.
Traditional Assets
| Asset | Value |
|---|---|
| Checking | $15,000 |
| Investments | $120,000 |
| Home equity | $80,000 |
| Subtotal | $215,000 |
Alternative Assets
| Asset | Value |
|---|---|
| Cryptocurrency | $40,000 |
| Gold coins | $9,500 |
| Collectibles | $5,000 |
| Subtotal | $54,500 |
Total Net Worth: $269,500
Some people take this further and track multiple net worth figures: liquid net worth ($135,000), traditional net worth ($215,000), and total net worth ($269,500). Each serves different purposes - liquid for emergency planning, traditional for more conservative projections, total for the complete picture.
Volatility Management
Alternative investments, especially crypto, can create wild swings in your net worth from month to month. Several techniques help smooth this out for more useful tracking.
A 3-month average takes your last three monthly values and averages them, reducing the impact of any single month’s volatility. High-water mark tracking only updates when the value exceeds the previous high, which is very conservative but prevents your net worth from swinging down during temporary dips. Band-based tracking only updates if the value changes more than 20% from the last recorded value, filtering out noise while capturing significant moves.
Beyond techniques, the psychological approach matters too. If checking crypto net worth daily causes stress or leads to poor decisions, check less often. Monthly updates are sufficient for net worth tracking purposes - daily monitoring serves trading, not wealth tracking.
Tax Considerations
Alternative investments create tax obligations that traditional investments handle more automatically. Worth tracking the right information from the start.
For crypto and alternatives, track the purchase date, purchase price (cost basis), quantity, and fees paid. This information matters for capital gains calculation when you eventually sell. Reconstructing this history later is painful; tracking it as you go is much easier.
One important distinction: net worth includes unrealized gains, but taxes apply only to realized gains (when you actually sell). Your net worth might show $50,000 in crypto gains, but you don’t owe taxes until you sell. Keep this in mind when looking at your total net worth versus your tax liability.
Using the Net Worth Tracker
The Net Worth Tracker can be customized to handle alternative investments well. Add rows for each alternative asset, create subtotals by asset class, and track historical values for comparison over time.
Adding an “Alternative Investments” section with current values, cost basis (for reference), and last update date gives you the information you need without overcomplicating your tracking. The template provides the structure; you add the specific assets you own.
When Alternatives Are Large Portion
When alternative investments grow to a significant percentage of your net worth, the tracking considerations become more important. This is where regular monitoring really matters.
If alternatives exceed 10-15% of your net worth, worth considering whether you’re comfortable with the volatility impact on your overall net worth, the liquidity constraints if you needed cash quickly, and the concentration risk of having so much in non-traditional assets. These aren’t necessarily problems, but they’re worth thinking about consciously.
Net worth tracking can reveal when alternatives have grown disproportionately large (or small) relative to your goals. A position that was 5% of your net worth when you bought it might now be 25% if it’s appreciated significantly. Regular tracking makes this visible so you can make intentional decisions about rebalancing.
Related
- Net Worth Tracker - Customizable for alternatives
- Tracking Investments in Net Worth Spreadsheet
- Net Worth Tracking for Beginners
- How to Include Business Assets in Personal Net Worth
Alternative investments deserve a place in net worth tracking - they’re assets you own. But treat them differently from traditional investments: use conservative valuations, track separately for clarity, and update less frequently to avoid volatility-driven stress. The goal is accurate financial awareness, not perfect valuation of every asset.