Sure, it's just an example. Theoretically, a 1.05% allocation should be rebalanced to 1.00% as well (every month/year). This could make the peaks and troughs less steep.

badabing

sure, but for a 1% allocation to go to 2%, bitcoin needs to go from $1T to $2T. 

if that happens, the amount of new interest will surely cancel out any rebalancing efforts… at least in the short-term.

bitcoin

Bitcoin is once again a trillion dollar asset

Rebalancing is often automatic. If you have a portfolio with a 1% btc allocation and it becomes 2%, half of it will be sold to get back to 1%. At least that's how I understand it. People can of course increase their allocation, but that requires doing smth..