How does positive convexity impact the profitability of cryptocurrency investments?
Transgenie marketingDec 26, 2021 · 3 years ago1 answers
Can you explain how positive convexity affects the profitability of investing in cryptocurrencies?
1 answers
- Dec 26, 2021 · 3 years agoPositive convexity can impact the profitability of cryptocurrency investments by creating opportunities for higher returns. When a cryptocurrency exhibits positive convexity, it means that the price tends to increase at a faster rate as it rises. This can allow investors to capture larger gains compared to cryptocurrencies with no or negative convexity. However, it's important to note that positive convexity does not guarantee profitability. Other factors such as market conditions, investor sentiment, and overall demand for the cryptocurrency also play a significant role in determining the profitability of the investment. Therefore, investors should conduct thorough research and analysis before making investment decisions in cryptocurrencies with positive convexity.
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