Why is it important to consider the variance of a digital asset before investing?

1 answers

• max linderDec 17, 2023 · 2 years ago
  At BYDFi, we believe that considering the variance of a digital asset is crucial before making any investment decisions. Variance reflects the price volatility of an asset, and understanding it helps investors assess the potential risks and rewards. High variance assets may offer the possibility of substantial returns, but they also come with higher risks. On the other hand, low variance assets may provide more stable returns, but with lower profit potential. By considering the variance, investors can make informed decisions based on their risk tolerance and investment objectives. It's important to carefully analyze the variance of a digital asset and consider it alongside other factors, such as market trends and project fundamentals, to make sound investment choices.
  778

  389