Rebalancing means a combination of purchases and/or sales ordered by Hedgehog on your behalf and selected by you, in your sole discretion, to keep the proportions of Assets in your Portfolio Account within specified ranges of the corresponding proportions of Assets in your Selected Stack.

One of the key features of Stacks is that they are able to be automatically or manually rebalanced based on a strategy that the client chooses. When it comes to rebalancing a portfolio, the process is generally the same, whether the portfolio consists of traditional assets such as stocks and bonds, or newer assets such as cryptocurrencies.

Here is a step-by-step guide to how ‘Stacks’ are rebalanced:

  1. The first step in rebalancing is to determine the desired asset allocation. This is based on the client's investment strategy which includes a choice of Market Capitalization (marketcap), Active Users or Total Volume.

  2. Next, we will look at the holdings in the portfolio and determine the percentage of each asset class that is currently owned.

  3. We will then compare the desired and current asset allocations in order to determine which assets need to be bought or sold in order to bring the portfolio back in line with the desired allocation.

  4. Make the necessary trades - we outline the necessary trades to buy or sell the assets needed to bring the portfolio back in line with the desired allocation. This is then executed manually by the user or automatically based on user preferences.

  5. Review and adjust as needed: It is important to periodically review the portfolio to ensure that it is still in line with the desired asset allocation. There is an automatic feature controlled by a setting labeled ‘Threshold’ to ensure that a stack has not drifted too far out of alignment. The application executes the rebalance action when that Threshold percentage is reached. Also, the stack can be manually rebalanced by the user at any time.

By offering ‘Stacks’ and automatically rebalancing them based on a strategy chosen by the user, we can help make it easier for users to invest in cryptocurrency and maintain a well-diversified portfolio.

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