What is rebalancing?

Rebalancing is the process of realigning to the intended allocation of a portfolio and involves periodically buying or selling assets in the portfolio to maintain the desired asset allocation.

For example, if a target allocation was 50% Bitcoin and 50% Ethereum but one of the coins (Ethereum) increased in value significantly. The new allocation could be 90% Ethereum and only 10% Bitcoin. To rebalance to the original allocation, you would need to sell Ethereum and/or buy Bitcoin to get back to the original allocation.