The way i've been looking at it is thru the lens of allocation ratios. You never have one asset with a high allocation (compared to another). You also have to decide ahead of time (when you start investing) what an appropriate allocation ratio is between the different assets (e.g., you might have 10% bonds, 80% stocks and 10% crypto).

Then, one or twice a year, you an reallocate assets as they drift away from the ratio. Doing it too often is detrimental, so my guess is once a year is "enough", and may be keep an eye on any fluctuations and if it grows bigger than some threshold, you do a second rebalance.

Let's say in 2021, crypto had a huge bull run, and went from just being 10% of your allocation to something close to 20%. It makes a lot of sense then, to sell the 10%, and rebalance back into the other assets you hold.