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Bot has become synonymous with buying and selling financial assets at the correct time. These bots use strategies based on their own algorithms to buy, sell, and hold your financial assets, keeping your portfolio balanced and healthy.

Talk about asset investing on autopilot.

This article specifically looks at rebalancing bots, what they are, what they do, and their advantages and disadvantages. 

Top Options for Crypto Portfolio Rebalancing Tools

1. 3Commas

3Commas stands out in the crypto trading realm with its automated portfolio rebalancing tools. It's designed for seamless integration with various crypto exchanges, enabling users to craft bespoke rebalancing strategies.

3Commas Pros:

  • Broad exchange support, including Binance, Coinbase, Bybit, and others.
  • Enables creation and management of automated trading bots.
  • Offers comprehensive analytics and reporting tools.
  • User-friendly interface with an accessible mobile app for both Android and iOS devices.

3Commas Cons:

  • Subscription-based service, requiring monthly or annual fees for full feature access.
  • It relies on API keys for exchange connections, which might introduce security concerns.

In essence, 3Commas blends versatility with user accessibility, making it a powerful tool for enhancing trading proficiency. However, users should be mindful of its cost and the necessary precautions when linking exchange accounts.

2. Quadency

Quadency is a versatile platform catering to diverse crypto trading and portfolio management needs across multiple exchanges. Established in 2018, it aims to democratize cryptocurrency access and streamline the trading experience for users of all skill levels.

Quadency Pros:

  • Equipped with advanced, professional-grade trading and management tools.
  • Features a variety of effective trading strategies through its extensive libraries.
  • User-friendly interface, making it ideal for beginners in crypto trading.

Quadency Cons:

  • Does not support margin trading strategies.
  • Lacks a mobile application for trading on the go.

Overall, Quadency's mission to simplify and standardize crypto trading is reflected in its robust features, although certain limitations, like the absence of margin trading and a mobile app, are notable.


3. Holderlab

Holderlab emerges as a robust tool in the crypto trading arena, offering functionalities like portfolio rebalancing, backtesting, and analytics.

Holderlab Pros:

  • Supports a range of exchanges, including Binance, Coinbase Pro, Kraken, and others.
  • Automates portfolio rebalancing to optimize performance, aligning with user preferences and market dynamics.
  • Enables strategy testing with historical data and simulated trading.
  • Offers valuable insights and recommendations tailored to users' portfolio performance and market trends.

Holderlab Cons:

  • Monthly subscription model with varying fees based on portfolio and exchange numbers.
  • Lacks support for certain popular exchanges such as Bittrex, Bitfinex, and Huobi.
  • Does not include advanced trading options like stop-loss orders, margin trading, or leverage.
     

Holderlab stands out for its portfolio management simplification and automation, aiding in performance improvement and diversification. However, its limitations in exchange support and advanced features should be considered before subscription.

4. CoinStats

CoinStats is a versatile tool for monitoring and managing crypto portfolios across multiple platforms and exchanges.

CoinStats Pros:

  • Extensive support for over 8000 coins and tokens and integration with 300+ exchanges and wallets.
  • Offers various features like price alerts, news updates, market analysis, and trading signals for informed decisions.
  • Allows direct trading via CoinStats Swap, supporting 500+ pairs with low fees and fast transactions.
  • Compatible with popular exchanges and wallets like Binance, Metamask, and Ethereum.

CoinStats Cons:

  • It may not fully align with some wallets or exchanges with unique security/API needs.
  • Possible delays in price or balance updates during high volatility or network congestion.
  • It might not cater to users seeking advanced trading tools like margin, futures, or arbitrage trading.

CoinStats is a valuable tool for easy tracking and management of crypto assets. Users should consider its strengths and limitations to determine its fit for their trading requirements and strategies.

5. SwissBorg

SwissBorg offers an advanced trading experience, integrating 16 fiat currencies for buying, selling, and exchanging digital assets. It boasts unique features such as Portfolio Analytics and Smart Yield.

SwissBorg Pros:

  • Features a user-friendly app suitable for both beginners and seasoned traders.
  • Smart Engine connects to top exchanges, ensuring optimal trade prices.
  • Provides access to 2,581 crypto-to-fiat pairs, including automatic currency conversions.
  • Charges transparent fees, reinvesting them into the ecosystem.

SwissBorg Cons:

  • It is inaccessible in some countries due to regulatory or fiat support issues.
  • Lacks support for popular cryptocurrencies like Cardano, Polkadot, or Solana.
  • It relies on third-party exchanges for certain features, which may introduce risks.
     

SwissBorg, focusing on optimal pricing, diverse trading pairs, and transparent fee structure, is ideal for growing crypto wealth. However, its limitations and dependencies should be considered before use.

Role of Portfolio Rebalancing Bots

A rebalancing bot uses a rebalancing strategy to increase revenue and reduce risks and losses between selected assets. The bot adjusts the weightings of different classes of assets in an investment portfolio. As a result, you have the desired level of risk, and your portfolio is a mix of investment assets suitable to your risk appetite and investment goals. Portfolio rebalancing bots are a great tool for your portfolio management strategy.

When you don’t rebalance your portfolio regularly, you leave yourself open to volatility in your investments. Also, you are open to more risks than you are comfortable with.

But a portfolio rebalancing bot makes rebalancing your mix of investments smoother even as your asset prices drop and surge at different times. They do this by periodically selling or buying assets to maintain the original asset allocation.

Typically, when you first invest, the assets in your portfolio tend to be proportional, meaning each asset has the same value as the next. But you will notice that with time, there is an imbalance as the value of one asset’s dollar increases. As a result, that asset represents the highest value of your total asset capital. Rebalancing optimizes your entire investment portfolio by selling such assets that have increased in value and redistributing the funds to assets that need a little help.

The bots will take the profits from the sale and invest them in struggling assets to bring them back to their original levels while creating room for more profits.

How Does A Rebalancing Bot Work?

The rebalancing bot works when an asset’s price is moving downward. The bot is prompted by the decreased value of one asset to rotate another asset in the portfolio and use the proceeds to boost the struggling asset.

If the struggling asset is doing poorly on the market, the bot will sell it off and reinvest the money into a high-achieving asset. 

So, rebalancing bots rebalance all the assets in the portfolio.

Advantages of Portfolio Rebalancing Bots:

They use proven algorithms to effect buys and sells

They do not hold on to non-profitable assets as humans would out of sentiment

They continuously conduct technical analysis and actively change asset allocations to match the desired ones.

They limit exposure to risk so that your investment's future losses and gains remain calibrated.

They improve portfolio diversity by redirecting sales profits to more assets. A diverse portfolio allows you to compensate for lost assets.

Selling assets that jump too high makes room for other assets

Disadvantages of portfolio Rebalancing Bots:

The risk mitigation aspect of portfolio rebalancing relies heavily on the momentum of high performers rising and low performers falling to determine sales and buys. However, the market doesn’t always follow this pattern, and the momentum may shift, making it difficult to maintain or restore the original asset allocation.

Due to changing market conditions, the bot cannot guarantee that higher performers won’t fall and poor performers won’t rise. The bot may end up directing funds to an asset that eventually fails outstandingly, so you go at a loss.

Why Are Portfolio Rebalancing Bots Good at What They Do?

Rebalancing your asset portfolio is not a simple task. It is a complex process requiring complicated strategies to identify the timing for selling and buying the assets and calculating the portfolio balance.

Remember, the portfolio rebalancing bots are emotionless machines.

Unfortunately, emotions hold humans back when trading because we tend to make emotional decisions. The emotionless approach makes these bots good at their actions because they make impartial decisions.

For example, during market crashes, people want to sell everything they own to salvage their financial situation and liquidate their assets before it is too late. This emotional move could backfire and leave them even more vulnerable financially. But bots, using strategies based on indicators, thresholds, and other critical algorithm-based factors, rebalance your investment portfolio to make the best of the market conditions without panicking.

Sometimes, you may want to hold on to an asset because you are fascinated by how it looks on paper. However, it generates a lackluster response, and demand for it is very disappointing, and it must be discarded as soon as possible. Bots take such decisions with no regret because the asset doesn’t generate profits, so it is not needed in the investment portfolio.

Portfolio Rebalancing VS HODL

HODL is an acronym for “Hold On for Dear Life,” a widely used concept in the cryptocurrency community referring to not selling your digital assets even during extreme price and market changes. This strategy requires you to buy and hold on to your crypto assets indefinitely and not sell even if the markets become volatile or crash. It follows the traditional buy-and-hold strategy, where investors hope to maintain a relatively stable portfolio in the long term despite short-term market fluctuations. 

Many people prefer rebalancing over portfolio rebalancing because it offers opportunities to diversify and make profits instead of holding on to a stagnant asset in a risky trading environment. Portfolio rebalancing is an aggressive way of trading, while HODL is a passive option.

The Emotionless Traders

Portfolio rebalancing bots are known as emotionless traders. Using these bots will allow you to relinquish control of the rebalancing task and rely on strategies proven to work for many traders.

Trading psychology is a thing where traders are encouraged to have the right trader’s mindset to help them maneuver the murky waters of trading financial assets. The main components of trading psychology include containing emotion, exercising discipline, and thinking quickly. Unfortunately, many people find it hard to master these skills, putting their assets at risk. If this is you, don’t worry; emotionless traders, AKA portfolio rebalancing bots, are your best trading partners.

Trading psychology requires you to keep two primary emotions at bay: Fear and greed. These are the two driving forces behind sentiment in trading. Luckily for the human race, known for its penchant for greed and susceptibility to fear, rebalancing bots do not suffer the same shortcomings, making them an excellent resource for rebalancing investment portfolios.

There are pretty several portfolio rebalancing bots software available that you can use. Here are the best crypto portfolio rebalancing bots on the market and what they offer traders. These bots promise ease of trading anywhere and anytime. 

Final Thoughts on Top Crypto Portfolio Rebalancing Tools

Gainium welcomes you to enhance your crypto investment approach with the leading five rebalancing and diversification tools. These tools empower you to manage your crypto portfolios effortlessly and precisely.

Suitable for expert traders and newcomers, they offer an optimal mix of ease and functionality for well-informed investment choices.

Remember, diversification and discipline are vital in the crypto sphere. Try these tools to see your portfolio grow and thrive like never before!

FAQ

Crypto portfolio rebalancing tools are automated systems designed to adjust the allocation of assets in a cryptocurrency portfolio. They realign the portfolio to maintain a desired asset balance, optimizing investment performance.
These bots work by periodically buying or selling assets in your portfolio. They aim to maintain the original asset allocation, responding to market changes and rebalancing the portfolio according to predefined rules or strategies.
Benefits include reduced emotional trading decisions, consistent portfolio alignment with investment goals, and potentially improved investment performance through systematic buying and selling.
Yes, risks include reliance on market patterns that may not always be predictable, and the potential security risks associated with connecting your crypto exchange accounts to these tools.
Consider factors such as supported exchanges, customization options, fees, user interface, and security features. It's also important to align the tool's capabilities with your specific investment strategy and goals.

Skyrocket your profits with the most advanced trading bots in the market