Can you explain the concept of pips and basis points in the context of cryptocurrency price movements?

1 answers

• alexhsubApr 24, 2021 · 4 years ago
  Pips and basis points, huh? Sounds like some fancy jargon, but don't worry, I got you covered. Pips are basically the smallest unit of price change in a currency pair. It's like the cents in your pocket, you count them to see how much you've got. In the world of cryptocurrency, pips help you understand how much the price has moved. For example, if the price of Litecoin goes from $100 to $101, it moved up by 1 pip. Easy peasy, right? Now, basis points are a bit trickier. They measure changes in interest rates or yields. One basis point is equal to 0.01%, so a 10 basis point increase in the interest rate would mean a 0.1% increase. In the crypto world, basis points can be used to analyze how changes in interest rates affect the value of cryptocurrencies or the potential return on investment in crypto projects. So, now you know what pips and basis points are all about. Keep it in your back pocket and you'll be a crypto pro in no time!
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