Crypto Rebalancing Premium
These are long-term digital asset holdings, not a systematic strategy. A rebalancing tool automatically buys whatever is underweight and sells whatever has run too far, keeping a handful of large coins near their target weights. Basically, fancy beta.
The problem
Buy and hold strategies can be diversified, until they aren’t. If some assets outperform others and weights drift, your intended allocation is gone, and you need to rebalance. It turns out that rebalancing does not just bring you back to your desired risk and allocation state — it also earns you a marginal excess return over a standard buy and hold. The research covers this very well (linked above), so I won’t explain it here.
The idea
Buy underweighted assets, sell overweighted ones. It is automated, but there isn’t too much complexity here.