Circulating tumor DNA (ctDNA) enables real-time genomic profiling of cancer without the need for tissue biopsy. ctDNA-based technology is seeing rapid uptake in clinical practice due to the potential to inform patient management from diagnosis to advanced disease. In metastatic disease, ctDNA can identify somatic mutations, copy-number variants (CNVs), and structural rearrangements that are predictive of therapy response. However, the ctDNA fraction (ctDNA%) is unpredictable and confounds variant detection strategies, undermining confidence in liquid biopsy results. Assay design also influences which types of genomic alterations are identifiable. Here, we describe the relationships between ctDNA%, methodology, and sensitivity–specificity for major classes of genomic alterations in prostate cancer. We provide recommendations to navigate the technical complexities that constrain the detection of clinically relevant genomic alterations in ctDNA.