What is crypto portfolio rebalancing?

Portfolio rebalancing is a strategy that investors use to realign the weightings of the assets within a portfolio. In crypto trading, this strategy allows cryptocurrencies to be restored to their initial state. Crypto portfolio rebalancing ensures a healthy mix of crypto assets and helps traders maintain their desired level of risk.

What is a crypto portfolio?

A crypto portfolio is a collection of cryptocurrencies owned by an investor or trader. Portfolios typically contain a variety of different assets, including altcoins and crypto financial products. It's pretty similar to a traditional investment portfolio, except you’re sticking to one asset class.

What is a balanced investment portfolio?

Maintaining a ‘balanced investment portfolio’ means structuring the exposure of your investments to an acceptable level of risk. This is normally achieved by splitting your portfolio across two categories with very different risk profiles: capital preservation (low risk/return) and growth (medium or high risk/return).

How can I reduce the risk of my crypto investments?

You can reduce the risk of your investments by holding different crypto assets (including stablecoins) and making sure to rebalance your asset allocation regularly. To make managing your portfolio easier, you can use a third-party portfolio tracker or manually record your transactions on a spreadsheet.