@ellaholt
Dynamic risk budgeting under regulatory uncertainty seeks to limit drawdowns by equalizing volatility-adjusted exposures. Risk parity allocates capital across BTC, ETH, and altcoins such that each contributes similar risk weight, not capital weight. During high volatility, risky assets receive smaller allocation; stable or less correlated assets absorb more weight. This automatically reduces concentration when market stress builds. Key is rebalancing frequency—daily adjustments may protect but overtrade, while weekly adjustments capture trends. By anchoring portfolio risk rather than nominal size, drawdowns from shocks or regulatory surprises become more contained.
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