The advice is everywhere — this measures whether it worked
Returning a portfolio to fixed weights sells whatever went up and buys whatever went down. That is profitable when assets take turns leading, because it trims the expensive holding and adds to the cheap one. It is costly when one asset simply keeps winning, because it repeatedly cuts the winner and funds the laggard. Which case you are in decides the outcome entirely, and crypto has mostly been the second, though the margin over any particular window is often small and can go either way — which is the reason to run the comparison rather than accept a rule of thumb.
The claim that rebalancing reduces risk is conditional in the same way. During a sustained decline it makes drawdown worse, since every rebalance moves money into the asset that is falling. It only cushions drawdown when the assets mean-revert against each other. Both drawdown columns are shown side by side so that direction is visible instead of assumed.
Fees are deducted because omitting them flatters rebalancing, and the effect scales with frequency — weekly rebalancing trades roughly thirteen times as often as quarterly for the same portfolio. Taxes are not modelled, and where each rebalance counts as a disposal they can outweigh every other effect on this page.
⚠️ Not investment advice. This is a backtest over one window and a handful of coins that survived to be listed today; coins that failed are absent from the comparison entirely. Slippage and taxes are excluded. All decisions and risks are your own.
It depends on whether the assets take turns leading. Rebalancing sells what rose and buys what fell, which pays off under mean reversion and costs money when one asset simply keeps winning. Crypto has mostly been the second case, so the advice is worth testing rather than assuming.
The table compares weekly, monthly and quarterly against never touching the portfolio, with fees deducted. More frequent rebalancing means more trades and more cost — weekly trades roughly thirteen times as often as quarterly for the same portfolio.
Only conditionally. In a sustained decline it makes drawdown worse, because each rebalance moves money into the falling asset. It cushions drawdown only when the assets mean-revert against each other, which is why both drawdown figures are shown rather than one.
Because one asset tends to dominate. Left alone, the winner grows into most of the portfolio, and rebalancing would have kept cutting it. The drift panel shows what the untouched weights became, which is also a reminder that the portfolio you end up holding is not the one you chose.
Fees are included and deducted from the values shown, because leaving them out flatters rebalancing. Taxes are not modelled at all, and in jurisdictions where each rebalance is a taxable disposal they can outweigh every other effect on the page.
It covers one window and a handful of coins that survived to be listed today, so it inherits survivorship bias — tokens that collapsed are absent from the comparison. Treat the direction of the result as informative and the exact figures as specific to this period.