How does lambda in exponential distribution affect the volatility of cryptocurrencies?

3 answers

• Feb 19, 2022 · 3 years ago
  The lambda value in the exponential distribution directly affects the volatility of cryptocurrencies. A higher lambda value means a higher transaction rate, which leads to more frequent price changes and higher volatility. On the other hand, a lower lambda value indicates a lower transaction rate, resulting in less frequent price changes and lower volatility. Therefore, lambda plays a crucial role in determining the volatility of cryptocurrencies.
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• Feb 19, 2022 · 3 years ago
  Lambda in the exponential distribution has a significant impact on the volatility of cryptocurrencies. When lambda is high, it implies a higher transaction rate, which leads to more frequent buying and selling activities in the market. This increased trading volume can result in higher price fluctuations and increased volatility. Conversely, when lambda is low, the transaction rate is lower, leading to less trading activity and potentially lower volatility in the cryptocurrency market.
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• Feb 19, 2022 · 3 years ago
  Lambda, the rate parameter in the exponential distribution, affects the volatility of cryptocurrencies by influencing the transaction frequency. Higher lambda values correspond to a higher transaction rate, which can result in increased volatility. Conversely, lower lambda values indicate a lower transaction rate, potentially leading to decreased volatility. It's important to note that the impact of lambda on volatility can be influenced by various other factors, such as market demand, liquidity, and external events.
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