What factors should I consider when calculating the total return on a digital asset?

1 answers

• Dec 25, 2021 · 3 years ago
  When calculating the total return on a digital asset, it's important to consider a few key factors. Firstly, you should assess the asset's historical performance. Look at how the asset has performed in the past and analyze its price movements over different time periods. This can give you an idea of its potential for future returns. Secondly, you should consider the asset's underlying fundamentals. Evaluate the technology, team, and community behind the asset to gauge its long-term viability and growth potential. Additionally, it's crucial to consider the asset's market liquidity. A highly liquid asset is easier to buy and sell, which can impact your ability to realize returns. Lastly, take into account any fees or costs associated with buying, selling, or holding the asset. These costs can eat into your overall return and should be factored in. By considering these factors, you can make a more informed decision and calculate the total return on your digital asset more accurately.
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