Rebalancing refers to the process of adjusting the composition of a cryptocurrency portfolio to maintain a desired level of asset allocation. This can involve buying or selling certain coins or tokens to ensure that the overall investment strategy aligns with the investor’s goals, risk tolerance, and market conditions.For instance, if a portfolio initially consists of 50% Bitcoin and 50% Ethereum, fluctuations in market prices can alter these percentages. If Bitcoin rises significantly in value, it may comprise 70% of the portfolio, while Ethereum drops to 30%. Rebalancing would involve selling some Bitcoin and buying Ethereum to restore the original 50/50 balance.This strategy helps mitigate risks and take advantage of market movements. Regular rebalancing can contribute to long-term investment success by ensuring that the portfolio stays in line with an investor’s objectives, rather than being skewed by the volatility of individual assets.