It’s hard to catch the train for every alt-coins at the right moment. Crypto rebalancing strategy is one of the strategy to solve the problem out there.
- 1 What is the crypto rebalancing strategy?
- 2 What is dual-coin rebalancing bot?
- 3 Should I rebalance my crypto portfolio?
- 4 Rebalancing strategy vs. HODL
- 5 How to start crypto rebalancing on Pionex?
What is the crypto rebalancing strategy?
Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original or desired level of asset allocation or risk. – Investopedia
What is dual-coin rebalancing bot?
Dual-coin rebalancing bot helps you to perform the rebalancing strategy with two selected assets. The USDT value for each asset starts with one on one ratio. There’s no one asset surges or dumps at the same path, and the bot rebalances them back to one on one ratio.
Currently, Pionex dual-coin rebalancing bot rebalances every 5 minutes.
Should I rebalance my crypto portfolio?
A rebalancing strategy is another way to smoother your portfolio while the price of each asset surges or drops at a different moment. It forces investors to sell high and buy low on different assets.
You will find it helpful if you have suffered from determined when is the right moment to sell your coin and switch to another coin.
Rebalancing strategy vs. HODL
According to the backtesting results for holding BTC and ETH and portfolio rebalancing. The performance is better compared to just HODL BTC and ETH. The following backtesting period is 2020.01.01 to 2021.04.01
If we’re in a bullish market and both coin performing good, then HODL both BTC and ETH won’t be the best choice according to the above backtesting. But keep in mind, if we’re in the bearish market then we might have some losses from holding these coins. Just the same as we holding BTC and ETH.
If we set the rebalancing frequency to 10 minutes, it outperforms 29% than holds both assets.
On the second image, you’ll see the change in the amount of BTC and ETH. We can find that the amount for BTC increases a lot on every rebalancing frequency, while the ETH amount decreases a bit.
But overall, the USDT balance under the rebalancing strategy outperform doing nothing.
Suppose you’re holding two assets that both go well in the long term. HOLD is not your best choice. The rebalancing strategy might help you earn more than HODL.
This is not intended to be financial advice. Just sharing what I’ve found during backtesting.
How to start crypto rebalancing on Pionex?
Upgrade to the latest app and you’ll see it right on top of the trading bot list.
Select Dual-coin Rebalancing Bot on the list.
Dual-coin rebalancing bot allows you to rebalance two of your assets. For more assets into the rebalancing strategy, we’ll release another bot in the future.
Choose 2 different assets and the total investment for rebalancing.
The rebalancing bot will use your investment to buy each asset on a 1:1 basis.
Rebalance every 5 minutes.
The rebalancing bot will rebalance your portfolio every 5 minutes. If the rebalance amount is lower than the minimum order value of that pair, then the bot will skip that period and wait for the next period.
Sign up for a Pionex account and start rebalancing your portfolio for free.