rebalancing for 2025.
reducing crypto allocation.
more conservative positioning.
current allocation (november) #
options: 60% ($267,660)
SPX puts, QQQ calls, sector ETFs.
premium selling + volatility plays.
futures: 10% ($44,610)
ES, NQ momentum strategies.
crypto: 30% ($133,830)
BTC, ETH, major altcoins.
total account: $446,100
target allocation (january 2025) #
options: 65%
increase premium selling capacity.
futures: 10%
maintain current.
crypto: 25%
reduce exposure by 5%.
why rebalancing:
crypto volatility elevated.
altcoin correlation increasing.
2025 regulatory uncertainty.
more conservative = sustainable.
crypto performance 2024 #
january-april:
BTC rally strong.
crypto strategies crushed.
+$18,200 crypto gains (jan-apr).
may-august:
consolidation.
reduced opportunity.
+$3,400 crypto gains (may-aug).
september-november:
volatility spike.
some gains, some losses.
+$4,800 crypto gains (sep-nov).
total 2024 crypto: +$26,400
30% of ytd gains came from crypto.
but variance increasing.
why reducing crypto allocation #
1. correlation creeping higher
BTC/ETH correlation: 0.82 (was 0.68 jan)
altcoin correlation: 0.74 (was 0.52 jan)
diversification benefit declining.
2. regulatory uncertainty 2025
SEC actions pending.
exchange scrutiny.
risk/reward shifting.
3. execution costs rising
slippage on altcoins: 8-12 ticks avg.
vs options: 2-3 ticks avg.
edge compressed.
4. volatility unsustainable
BTC daily swings: 3-5% becoming normal.
options daily swings: 0.5-1.5% typical.
crypto variance exhausting.
implementation plan #
december:
reduce altcoin positions.
maintain BTC/ETH core.
january 2025:
shift capital to options strategies.
increase premium selling.
target: 65% options, 25% crypto.
what stays in crypto allocation #
keeping:
BTC (15% of account).
ETH (8% of account).
top 5 altcoins (2% of account).
removing:
smaller altcoins.
speculative plays.
meme coins (never had much anyway).
focus on liquid major assets only.
expected impact on returns #
2024 with 30% crypto:
ytd +21.6% (crypto contributed ~30% of gains).
2025 with 25% crypto:
targeting +15-18% annual.
reduced variance, more sustainable.
options strategies more predictable.
crypto strategies more volatile.
trade excitement for consistency.
lessons from 2024 crypto #
what worked:
BTC/ETH momentum following.
major exchange trading (Coinbase, Kraken, Binance.US).
automated execution via ccxt.
what didn’t work:
altcoin speculation.
trying to catch bottoms.
ignoring correlation increases.
2025 focus: BTC/ETH only, reduce noise.
portfolio variance comparison #
30% crypto allocation:
daily variance: ±1.2%
monthly variance: ±3.8%
25% crypto allocation:
estimated daily variance: ±0.9%
estimated monthly variance: ±2.9%
-24% variance reduction = better sleep.
therapy discussion (12/4) #
dr. r: “reducing crypto. why?”
me: “variance exhausting. up 4% monday, down 3% tuesday. options more predictable.”
dr. r: “you’re choosing boring over exciting.”
me: “yeah. 22 years old choosing boring. growth.”
dr. r: “or wedding planning making you risk-averse?”
me: “maybe both. A. and i thinking long-term. crypto swings feel reckless now.”
interesting point.
what A. thinks #
her reaction:
“finally. you stare at crypto charts too much.”
me: “it’s automated, i don’t stare.”
her: “you stare at the automation monitoring dashboard.”
fair.
she’s right:
crypto stress > options stress.
reducing crypto = reducing stress.
2025 goal: sustainable not spectacular.
implementation timeline #
december 8-15:
exit smaller altcoin positions.
consolidate to BTC/ETH.
december 16-31:
hold through holidays (no major moves).
january 2-15:
scale up options strategies.
finalize 65/10/25 allocation.
by january 15: rebalance complete.
tonight (december 7, 2:32pm) #
rebalancing for 2025.
crypto 30% → 25%.
options 60% → 65%.
reasoning:
correlation increasing.
variance exhausting.
regulatory uncertainty.
goal:
sustainable not spectacular.
reduce stress.
wedding may 2025 = thinking long-term.
implementation starting next week.
2:32pm saturday. year-end rebalancing. reducing crypto 30% to 25%, increasing options 60% to 65%. crypto variance exhausting (daily ±1.2% swings). 2024 crypto contributed 30% of ytd gains but correlation rising (BTC/ETH 0.82 vs 0.68 jan). targeting -24% variance reduction for 2025. implementation dec 8-15 exit altcoins, jan 2-15 scale options. choosing sustainable over spectacular.
-AK