Digital assets,
a matter of proportion

Digital assets are a young and volatile asset class. Asset allocation and risk assessment come before the price.

Principles

Why judge one asset apart from the whole?

Asset allocation divides a portfolio among kinds of assets. Digital assets are one kind, and the right share may be none.

Why look at the gain before the loss?

Position size is usually set by the loss that can be borne, not by the gain hoped for. The whole amount can be lost.

Why count the capital and not the risk?

A small share of capital can carry a large share of the risk. A position is often measured by the risk it adds.

Asset allocation,
in four parts

Drift and rebalancing

Weights drift when prices move.

Rebalancing means returning to chosen weights. In a stressed market it may not be possible.

Limits in writing

A limit comes before a position.

A limit caps concentration: the share one holding may reach. It should be set in calm markets.

Markets and regulation

No holding stands on its own.

In a crisis, assets that moved apart can fall together. Laws differ by country and change often.

Sources and review

A price is only as good as its source.

Prices should come from named, dated sources. An allocation should be reviewed when the facts change.

This page sets out general principles. It does not describe any product or service, and it is not advice. Digital assets are highly volatile. Their value can fall sharply, or to zero. ‘The Monetary Authority of Singapore (“MAS”) has consistently warned the public that the trading of digital payment tokens (“DPTs” or commonly referred to as cryptocurrencies) is highly risky and not suitable for the general public.’ (MAS Guidelines PS-G02, paragraph 1.1, 17 January 2022)

Risk assessment, in five steps

  1. Naming the risks

    Risk is more than price. Whoever holds an asset can fail, and the asset may be gone for good.

  2. Measuring the loss

    Volatility is how much a price moves. Drawdown is how far it falls from a peak.

  3. Checking the exit

    How long would it take to sell the whole position in a stressed market, and at what cost?

  4. Testing under stress

    A position should be tested against past crises, and against events not yet seen.

  5. Reviewing the limits

    A limit should be reviewed regularly. Whoever watches it should not be the one who decides.

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Digital assets are high risk

Total loss
You can lose all of the money you put into digital assets.
Not advice
Nothing on this website is investment advice or an offer.
Impersonation
LeptonFi will never ask you to send money or digital assets.

The full list of risks is on the Important information page.

A fast market
deserves a slower look.

Contact us

Small parts,
carefully understood.

A lepton is an elementary particle. The electron is the best-known one. We chose the name as a reminder that large things are made of small parts, and each part deserves attention.

LeptonFi is a brand of TAAFFEITE CAPITAL MANAGEMENT PTE. LTD. This website shares general information about digital assets as an asset class.

LeptonFi is a brand of TAAFFEITE CAPITAL MANAGEMENT PTE. LTD. (UEN 202138035K). The company holds a Capital Markets Services Licence for fund management issued by the Monetary Authority of Singapore. This website does not offer any fund or other investment product, and nothing on it is an offer or a solicitation. A licence does not mean that MAS has reviewed or endorses this website.

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