You can choose to track your cryptocurrencies manually as a single Investment (Asset Class: Crypto / Asset Type: Other), but because of the nature of custody wallets (having a crypto component and potentially a cash one), when tracking transactions some clarifications are required to avoid classifying them incorrectly.
A detailed explanation is provided below, but the key information is:
- with reference to Transactions, you only need to record Deposits and Withdrawals (movements IN and OUT of the wallet);
- with reference to Valuations, you need to update the wallet valuation each time there is an Income (dividends, coupons, etc) or an Expense (execution or custody fees);
Any movement WITHIN the wallet (buying crypto with the cash in the wallet, or selling crypto and retaining the proceeds within the wallet) must not be recorded.
DEPOSIT: if you deposit cash (or transfer crypto) into your an Exchange/Custodial Wallet, then the definition of a Deposit remains valid and you account for it by recording a Deposit transaction. But if you use some of the cash in the wallet to buy crypto, there is a Deposit transaction for the crypto component and a Withdrawal transaction for the cash component, so - with the exclusion of transaction fees you may be charged to buy the crypto (see EXPENSE below) - there is nothing to record as the two transactions cancel each other out.
WITHDRAWAL: the same is valid if you sell crypto, but keep the sale proceeds within the wallet. The overall value does not change because of the sale, and you only need to account for a Withdrawal if you transfer the cash OUT of the wallet.
EXPENSE: an Expense does not change the value of individual Investments, but in the case of wallets it does, as the cash component goes down in value once that expense is taken into account. So if you are charged 5 USD to buy some crypto, you account for it by updating the valuation of the wallet (reducing it by 5 USD).
INCOME: the same is valid for Income, since the value of the wallet will be increased by that income once it is received; even though the crypto component that generated that income has not changed in value because of it (unless the income is paid in crypto), the cash component has - and you account for it by updating the valuation of the wallet.