What is the difference between beta and alpha in the cryptocurrency market?

1 answers

• David FunchessAug 18, 2024 · a year ago
  In the cryptocurrency market, beta and alpha are two important factors to consider when evaluating investment opportunities. Beta measures the volatility of a cryptocurrency compared to the overall market. A beta of 1 means the cryptocurrency's price moves in line with the market, while a beta greater than 1 indicates higher volatility. Alpha, on the other hand, measures the excess return of a cryptocurrency compared to its expected return based on its beta. A positive alpha suggests that the cryptocurrency has outperformed its expected return, while a negative alpha indicates underperformance. By understanding beta and alpha, investors can make more informed decisions when investing in cryptocurrencies. For more information on cryptocurrency investments, you can check out BYDFi's comprehensive guides and resources on their website.
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