How can investors use standard deviation to assess the stability of a cryptocurrency?

1 answers

• Lysgaard JansenDec 25, 2022 · 3 years ago
  As an investor, you can use standard deviation to assess the stability of a cryptocurrency by looking at the historical price data. Standard deviation measures the volatility or dispersion of prices around the average price. A cryptocurrency with a low standard deviation indicates that its price has been relatively stable over time, while a high standard deviation suggests that the price has been more volatile. By considering the standard deviation, you can get an idea of the level of risk associated with the cryptocurrency. However, it's important to note that standard deviation is just one factor to consider when evaluating the stability of a cryptocurrency. Other factors such as market demand, project fundamentals, and regulatory environment should also be taken into account to make informed investment decisions.
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