I plan to allocate around 5% of my portfolio in bitcoin.
If I build the allocation with 20K USD average price. After some time I might experience different scenarios:
- 1 bitcoin = 100K USD. Then my bitcoin allocation might be 20% of my portfolio.
- 1 bitcoin = 5K USD. Then my bitcoin allocation might be 1.3%.
Probably I would not sleep well if my bitcoin allocation become like 1/3 of my portfolio.
Is there a popular bitcoin rebalancing strategy? what would be a reasonable percentage ranges?
I would like to write down the bitcoin rebalancing strategy and stick on it. To avoid future crypto emotional headaches by hesitating should I buy more, should I sell a bit, I should have done thatâŠ
In permanent portfolio every asset has a 25% allocation, and a popular re-balancing strategy is when any asset reaches 15% or 35%, but I have the feeling that this range may be very short for the bitcoin volatility.
If the re-balance range is too short, we can miss a lot of momentum gains.