MetenaCrypto allocation: definition and example
How your capital is split between several assets, expressed as target percentages.
Definition
An allocation sets the share of each asset in the portfolio: 50% bitcoin, 30% ether, 20% stablecoins, for example. It turns the thesis into numbers and determines most of the risk, well before the choice of when to buy.
The actual allocation drifts as soon as prices move. An asset that doubles takes up more room than planned, and the portfolio becomes riskier without any decision having been made. Comparing the target with reality on a regular basis lets you see this drift.
Two settings complete an allocation: a cap per asset, to limit concentration, and a rebalancing rule, which says when and how to return to the target.
Worked example
Target: 50% BTC, 30% ETH, 20% USDC on $10,000. Six months later, bitcoin has risen 80% and ether 10%. The portfolio is worth $14,300 and is split as follows: 63% BTC, 23% ETH, 14% USDC.
In Metena
In Metena, the target allocation is part of your strategy. When an exchange or a wallet is connected, the app compares it with your actual positions and shows the gap.
Notify me at launchRelated terms
- Rebalancing
- Adjusting the portfolio to get back to the planned allocation when one holding has risen or fallen too far compared with the others.
- Diversification
- Spreading your capital across assets that do not react in the same way, so that a single decline does not take the whole portfolio with it.
- Money management
- Managing the size of your positions and your exposure: how much to risk per holding, what reserve to keep, which limits never to cross.
- Stablecoin
- A crypto-asset designed to hold a stable value, usually pegged to a currency such as the dollar. Often used as a reserve so you are not 100% invested.
Related guides
- Building a crypto strategy from A to Z
- Thesis, allocation, position sizing, entry and exit rules, testing: the parts of a written crypto strategy, in the order in which they are decided.
Put these ideas into practice.
Write your strategy in a few minutes: Metena analyses it when you ask and explains each term in context.
Notify me at launchEducational content. It is not investment advice. Crypto-assets carry a high risk that can go as far as the total loss of capital.