Despite rapid growth and increasing attention from investors and regulators, cryptocurrency markets remain largely inefficient. Although the market has become more efficient over time,: Compared to traditional financial markets, crypto markets have lower liquidity, making them more susceptible to large price swings and manipulation.
In conclusion, while cryptocurrency markets are inherently inefficient due to various structural and behavioral factors, these inefficiencies present opportunities for systematic investment strategies. A momentum index not only leverages these opportunities but also helps investors overcome the cognitive biases that often lead to suboptimal investment decisions. By doing so, it offers a valuable tool for navigating the volatile and rapidly evolving world of digital assets.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.
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