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🔥 Artist of the weekend: Lazy Square Alexey Semenov aka Lazy Square is a designer, artist, and 2D animator influenced by satirical American animation. Check out his awesome new video for crypto wallet 1inch. Director's Cut 😉 Twitter link YouTube link

📍 The chart above 👆 shows the option of investing $500 every month and different rebalancing strategies: once a month, annually, and no rebalancing at all. But it's important to note that these are statistics for the Stock Market. And we see that investors who do not touch their portfolio but add assets have the highest returns.  The result in all three cases is not much different. The graph concludes that rebalancing is not such an important decision. In the chart above, rebalancing monthly vs. "never," we don't see a significant difference after 36 years. But that's how it works for the U.S. Stock Market. It is less volatile than the cryptocurrency market, where an investor in a year often experiences the same thing as an investor in traditional investments in 10 years, and crypto projects have a shorter life span and a more straight up-and-down cycle. Therefore, it is logical that in the crypto market, rebalancing is of greater relevance in portfolio investing precisely because of market volatility.

What is rebalancing in portfolio investing? Its impact on a portfolio. (Part 2) Rebalancing can reduce your returns as you often sell what is growing faster (alts of some industries) to buy what is growing slower (BTC). Without rebalancing, you will eventually get a more aggressive portfolio. Your 60/40 portfolio will ultimately turn into an 80/20 portfolio.  ✔️ So why do you need rebalancing?  Because you chose to allocate assets based not only on maximum return but also on risk. Let's look at the Stock Market as a market with much history. If you look at the 2002 dot-com crash and the 2008 financial crisis, rebalanced portfolios outperformed portfolios without rebalancing. You may not need a super-aggressive portfolio if you are in or approaching retirement. If the market crashes right after you retire, you'll be glad you have a 60/40 portfolio (Alts/stablecoins) instead of 90% Alts.

🧐 In 2023, stablecoin decoupling events are becoming more common

What is rebalancing in portfolio investing? (Part 1) Rebalancing is the practice of investing, where you have a target share in your portfolio for each type of investment. Over time, your assets grow at different rates. Rebalancing is trading what goes out of balance to return to your target share. ✔️ Simplified example  An investor has chosen a portfolio of 60% - altcoins 40%: BTC and ETH. Over time, large coins and altcoins behave differently. For example, after six months, you will find that alts have grown faster than BTC and ETH and will end up at 65/35 instead of 60/40. So, to rebalance, you could sell 5% of your portfolio consisting of alts and use the proceeds to buy BTC and ETH. You are then back to 60/40. First chart 👆 ✔️ Asset class and sector allocation Let's look at a more sophisticated version of the portfolio. 25% are Stablecoins on which you get passive income from lending or liquidity pools 25% BTC 25% are DeFi protocol tokens, as they are often the most profitable relative to staking 25% - tokens of infrastructure projects for AI, high-risk and very promising projects. Over time, some asset classes will rise more than others, and some will lose value altogether. And you lock in profits on one asset class, buy another asset class, and hold the portfolio back to the original ratio. Diagram below 👆

A series of consecutive losses: A sequence is an open wound, and a single significant loss does not bother you for long (Part 2) Here - part 1 Continuing the crucial topic of a series of losses. Today we will focus on the psychological aspects. ✔️ Losses are always painful whether you've been trading for 20 years or are making your first trades. I hope everyone understands that it is a myth that there are professionals somewhere who consistently sell only in the plus and do not face a series of losses. It's just trivial mathematics. ✔️ An individual loss of even 40-50% of the deposit in one trade is much easier to survive than a series of 25-30% losses. When you get a single significant loss in one trade, you can fool yourself with the following excuses: - it's just one trade; I can beat back the loss with just one successful trade. - I got unlucky; the market was irrational (and it's supposed to be rational ;) ) - if I had closed earlier, I would have made a much smaller loss - had I held the position longer, the price would have turned around, and I wouldn't have made a loss at all.   An individual loss is easier to forget; we all want to forget what brings us pain sooner. A consecutive series of losses do not give as many maneuvers for excuses. It's often a blow or a test of confidence in yourself and your trading method.  ✔️ A series of losses is challenging for an investor making 2-3 monthly trades.  Imagine you have been losing all your trades for several months in a row, even if you had only 7-8 of them. Your psychological state constantly deteriorates, and you want to open the trading terminal less frequently to check your positions. But in the long run, it's more just a statistical outlier. ✔️ Disrupt your trading system to take the pain away. You already realize that you won't be able to beat back losses quickly without breaking your risk management and trading rules. This is a hazardous time for your deposit, as there is a great temptation to make large trades with a high risk to take the pain away. The reason for this behavior is apparent. As soon as possible, take the pain away and regain confidence in your trading. A statistical outlier is a measurement result that stands out from the overall sample. 📍 What to do? Awareness and acceptance of the inevitable facts will help: - A natural tendency to run away from pain - and often, you will go along with this tendency rather than making rational decisions - a series of losses is inevitable for all trading systems and investors, and you need to accept that and be prepared to survive it.  - Test your trading system on history and determine if this series of losses indicates that your trading method is no longer working or is a statistical outlier.  If it is an outlier, keep trading, look for new opportunities for good trades, and manage your risk.

🔍 After a 14-month decline in demand for stablecoins, the total stablecoin market has dropped from a peak of $163 billion to a current value of $124 billion -$39 billion (-24%). However, the monthly percentage change in the market capitalization of stablecoins has reached equilibrium, indicating that the stablecoin market could move into expansion mode.

BTC behavior within different regions and exchanges ✔️The first chart 👆 BTC: Regional Month-over-month price change The first conclusion that can be made is that the tremendous growth happened only to traders from the USA. And despite the significant volumes from Binance and OKX. Investors from Coinbase and Kraken exchanges organize a solid growing movement (because the peak of trade on them is during the working hours of American conversations. The second conclusion is already on the current situation. The investors from Asia are joining the uptrend, and the revival, if it is worth waiting for, is during the night time (Moscow time) because the American investor is already quite exhausted. ✔️The second chart 👆: Bitcoin Change Exchange Netflow The conclusion from the chart: the correction started when liquidity flowed to the Binance exchange. Maybe due to liquidity and convenience to take the short or the exchange's reliability. But after that, the market often starts to fall.