Close Menu
  • Home
  • Altcoin
  • Bitcoin
  • Crypto
  • Forex
  • Online Money
What's Hot

op return – What is the justification for allowing multiple OP_RETURN outputs per transaction in Bitcoin Core v30?

October 4, 2025

Highest Lowest MT4 Indicator – ForexMT4Indicators.com

October 4, 2025

Google Search serving issue in some locales

October 4, 2025
Facebook X (Twitter) Instagram
  • Altcoin
  • Bitcoin
  • Crypto
  • Forex
  • Online Money
Facebook X (Twitter) Instagram
Cointelegraphe
  • Home
  • Altcoin
  • Bitcoin
  • Crypto
  • Forex
  • Online Money
Cointelegraphe
Home»Bitcoin»Why High Volatility in Crypto Assets Can Be a Good Thing for Investors
Why High Volatility in Crypto Assets Can Be a Good Thing for Investors
Bitcoin

Why High Volatility in Crypto Assets Can Be a Good Thing for Investors

adminBy adminJuly 4, 2024No Comments2 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email



A. With respect to correlation, a volatile asset like crypto is actually very important to decrease the overall volatility of a portfolio. Lowering the overall volatility of a portfolio is important as it helps smooth investment returns over time. This is important for many reasons. For example, an investor could have significant and unpredictable liquidity needs. If they have a portfolio of highly correlated assets and those assets are experiencing a period of poor returns, they would be withdrawing a larger percentage of their portfolio compared to a portfolio that included less correlated assets. Crypto, having a low correlation with traditional assets, could help in this regard. Its volatility has historically been positively skewed so even though it has big swings, when all other assets are down it can provide a ballast to your portfolio. Smoothing returns also helps from a cognitive perspective for most investors. People can get too emotional when looking at their portfolio’s performance. Big price moves have a visceral effect where large moves up make people want to buy more (usually right before a drop) and large moves down make people discouraged and pull money out (right before performance rebounds). Including at least a small portion of (less-correlated) crypto in a portfolio smooths the returns of a portfolio so when investors check in, they see more modest gains or losses. This helps keep their portfolio out of sight and out of mind which generally improves the chances of long-term success. Crypto, while volatile, should not be viewed in isolation but in the context of how it can help create a truly diversified portfolio that will help create long-term wealth for investors.



Source link

Assets crypto Crypto for Advisors Financial Advisers Financial Advisors Good High Investors Opinion Volatility
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
admin
  • Website

Related Posts

op return – What is the justification for allowing multiple OP_RETURN outputs per transaction in Bitcoin Core v30?

October 4, 2025

XRP’s Next Rally Predicted To Shock Markets

October 2, 2025

FOMC Rate Cuts Loom As Bitcoin Holds Above $109,500 EMA

October 1, 2025

NYDFS Chief Harris to Leave New York Regulator Next Month

September 30, 2025
Add A Comment
Leave A Reply Cancel Reply

Top Insights

op return – What is the justification for allowing multiple OP_RETURN outputs per transaction in Bitcoin Core v30?

October 4, 2025

Highest Lowest MT4 Indicator – ForexMT4Indicators.com

October 4, 2025

Google Search serving issue in some locales

October 4, 2025

BTC Nears Record Highs as Total Market Cap Peaks at $4.21T

October 4, 2025
ads

Subscribe to Updates

Get the latest creative news from Cointelegraphe about Crypto, bItcoin and Altcoin.

About Us
About Us

At CoinTelegraphe, we are dedicated to bringing you the latest and most insightful news, analysis, and updates from the dynamic world of cryptocurrency. Our mission is to provide our readers with accurate, timely, and comprehensive information to help them navigate the complexities of the crypto market.

Facebook X (Twitter) Instagram Pinterest YouTube
Top Insights

op return – What is the justification for allowing multiple OP_RETURN outputs per transaction in Bitcoin Core v30?

October 4, 2025

Highest Lowest MT4 Indicator – ForexMT4Indicators.com

October 4, 2025

Google Search serving issue in some locales

October 4, 2025
Get Informed

Subscribe to Updates

Get the latest creative news from Cointelegraphe about Crypto, bItcoin and Altcoin.

Please enable JavaScript in your browser to complete this form.
Loading
  • About us
  • Contact Us
  • Shop
  • Privacy Policy
  • Terms and Conditions
Copyright 2024 Cointelegraphe Design By Horaam Sultan.

Type above and press Enter to search. Press Esc to cancel.