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Earning with Broad Portfolio

How to earn with Broad Portfolio - Markowitz-optimized crypto portfolios with monthly rebalancing.

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Broad Portfolio generates a Markowitz-optimized token allocation that maximizes risk-adjusted return for a chosen number of crypto assets. Earnings come from portfolio price appreciation combined with the systematic efficiency gains of monthly rebalancing.

How returns are generated

The optimizer selects the token weights that maximize the Sharpe Ratio - the amount of return per unit of total risk. Holding that allocation gives you:

  • Diversification benefit - spreading across uncorrelated tokens reduces portfolio-level volatility without sacrificing proportional return
  • Rebalancing alpha - monthly rebalancing sells tokens that have grown above their target weight and buys those that have fallen below, systematically locking in gains and buying dips within the portfolio

The historical simulation on the tool page shows how the optimized portfolio would have performed against a benchmark over time, giving you a concrete reference for what the strategy has delivered historically.

Choosing the right number of tokens

The Sharpe and Volatility charts on the tool page show how portfolio metrics change as the token count increases:

  • Sharpe Chart - the curve rises steeply with the first few additions, then flattens. The point where the curve plateaus is where additional diversification stops improving risk-adjusted return.
  • Volatility Chart - shows how portfolio-level volatility falls as more tokens are added. Most of the reduction happens in the first 10–20 assets.

For most users, the efficient range is 15–30 tokens. Below 10, concentration risk is high. Above 40–50, transaction costs at rebalance begin to erode the marginal diversification gain.

Monthly rebalancing

The optimizer produces a target allocation based on historical data. As prices move, actual weights drift from the target - and the efficiency advantage shrinks. To maintain it:

  1. Re-run Broad Portfolio at the start of each month with the same token count
  2. Compare the new weights to your current holdings
  3. Adjust positions to match the updated allocation

Monthly rebalancing captures most of the MPT efficiency benefit while keeping rebalancing costs manageable. More frequent rebalancing increases transaction costs without a proportional improvement in outcomes.

What to watch

  • Backtested results - the simulation uses historical data. Past performance does not guarantee future results, particularly for tokens with short price histories.
  • Fees and slippage - for larger portfolios with many tokens, rebalancing costs across 20–30 positions add up. Factor these into net return expectations.
  • Token selection - the optimizer selects from the universe of available tokens. Results vary significantly based on the market period used for optimization.

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