I'm not interested in trading, but I would like to hear a trader's perspective on asset allocation into Bitcoin. If I set a target allocation for my net worth in Bitcoin, then it seems to me like I would end up buying low and selling without having to resort to chart analysis. The only questions would be what percentage to target, and how frequently to rebalance. Thoughts?
Discussion
The first thing I would say is to distinguish between trading and investing.
As a trader asset allocation is only important in so far as it allows me to hedge and/or run a correlated/un-correlated book.
If you're a "crypto" trader, then $BTC/$ETH are your benchmarks.
But for most people who don't care about trading, you should honestly consider whether you can really outperform $BTC and how much time you are willing to spend on that endeavour.
Some sort of passive DCA'ing approach is probably best suited to most people, and while there's a good discussion to be had about which is the best DCA approach, from a psychological perspective you're better off following a systematic DCA approach than one that relies more on human judgment.
Yeah but I'm not talking about constantly increasing my stack of sats, but rebalancing it on a set time interval based on a target percentage of my net worth.
Yes, but if one could time their entries then $BTC would grow as a percentage of their net worth more quickly.
You would then rebalance and start the process again.
But I don't think that's the question you are asking.
It always goes back to what are your financial goals, and how much time, and personal energy are you willing to commit?