Which metric, total return or absolute return, is more important to consider when evaluating the performance of a cryptocurrency?

3 answers

• Om SuryavanshiNov 10, 2023 · 2 years ago
  Both total return and absolute return are important metrics to consider when evaluating the performance of a cryptocurrency. Total return takes into account both price appreciation and dividends or interest earned from holding the cryptocurrency. It provides a comprehensive measure of the overall return on investment. On the other hand, absolute return focuses solely on the price appreciation of the cryptocurrency. It gives a clearer picture of the capital gain or loss. The choice between the two metrics depends on the investment objective. If the goal is to maximize overall returns, total return should be given more importance. However, if the focus is on capital gain or loss, absolute return becomes more relevant. Ultimately, it is important to consider both metrics in conjunction with other factors such as risk and market conditions to make an informed evaluation of the cryptocurrency's performance.
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• mahfuj ahmadNov 27, 2020 · 5 years ago
  When evaluating the performance of a cryptocurrency, the metric that should be given more importance depends on the investor's goals and risk tolerance. Total return takes into account both price appreciation and any dividends or interest earned from holding the cryptocurrency. This metric provides a holistic view of the overall return on investment. On the other hand, absolute return focuses solely on the price appreciation of the cryptocurrency, disregarding any additional income. If an investor is primarily concerned with capital gain or loss, absolute return may be more important. However, if the investor is looking for a comprehensive measure of the cryptocurrency's performance, total return should be considered. It is important to note that both metrics have their merits and limitations, and a balanced evaluation should take into account other factors such as volatility, market conditions, and the investor's risk appetite.
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• Casaan CadeMar 11, 2024 · a year ago
  When evaluating the performance of a cryptocurrency, it is crucial to consider both total return and absolute return. Total return provides a comprehensive measure of the overall return on investment, taking into account price appreciation as well as any dividends or interest earned. This metric is particularly important for long-term investors who are interested in maximizing their overall returns. On the other hand, absolute return focuses solely on the price appreciation of the cryptocurrency, without considering any additional income. This metric is more relevant for short-term traders who are primarily concerned with capital gain or loss. Ultimately, the choice between the two metrics depends on the investor's investment horizon and objectives. It is recommended to consider both metrics in conjunction with other factors such as risk, market conditions, and the investor's individual preferences.
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