1. What Is Rebalancing?
Rebalancing means restoring the original allocation when the proportions of assets in a portfolio drift away from their targets.
2. Why Is It Needed?
You might start with BTC 70%, ETH 20%, and altcoins 10%, but a sharp Bitcoin rise can leave BTC at 85%. This erodes the benefits of diversification.
3. Rebalancing Methods
- Time-based — Rebalance regularly, 1 time each month.
- Threshold-based — Act when an allocation deviates from its target by 5% or more.
- Hybrid — Rebalance 1 time a month, and immediately when the deviation reaches 10%.
4. Example Allocations
📊 Allocations by Investment Style
Conservative: BTC 60% | ETH 25% | Stablecoins 15%
Balanced: BTC 50% | ETH 25% | Altcoins 15% | Stablecoins 10%
Aggressive: BTC 30% | ETH 25% | Altcoins 35% | Memecoins 10%