Portfolio Construction & Rebalancing

The core-satellite approach: 50-70% in 'core' holdings (BTC, ETH), 20-30% in 'satellite' positions targeting specific themes (L1s, DeFi, AI, RWAs), and 5-10% in high-risk/high-reward plays. This balances stability with upside potential.

Rebalancing means restoring target allocations periodically. When Bitcoin rallies from 50% to 70% of your portfolio, you sell some BTC and buy underweight positions. It feels counterintuitive but systematically enforces buy-low-sell-high discipline. Monthly or quarterly rebalancing historically improves risk-adjusted returns.

During bull markets, most crypto assets are highly correlated, everything rises together. During crashes, quality assets decouple from speculative ones, BTC might drop 30% while altcoins drop 80-95%. True diversification includes different ecosystems, use-case categories, risk profiles, and stablecoin dry powder for buying opportunities.

The psychology is as important as the math. FOMO during bull runs tempts you to go all-in on whatever is pumping. Panic during crashes locks in losses. The portfolio framework protects you from both extremes. Build with a plan, not with emotion. Rebalancing provides the discipline to take profits and buy dips systematically.