What are the potential risks and drawbacks of relying solely on total return calculations for evaluating digital currencies?

3 answers

• Dec 17, 2021 · 3 years ago
  Relying solely on total return calculations for evaluating digital currencies can be risky. While total return provides a measure of the overall performance of a digital currency, it doesn't take into account other important factors such as market volatility, regulatory changes, and technological advancements. These factors can have a significant impact on the value and future prospects of a digital currency, and relying solely on total return calculations may lead to a skewed evaluation of its potential. It's important to consider a wide range of factors when evaluating digital currencies to make informed investment decisions.
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• Dec 17, 2021 · 3 years ago
  When evaluating digital currencies, relying solely on total return calculations can be misleading. Total return calculations only consider the price appreciation and dividends of a digital currency, but they do not take into account the underlying fundamentals and risks associated with the currency. Factors such as the technology behind the currency, the team behind its development, and the market demand for the currency are crucial in determining its long-term prospects. Therefore, it is important to conduct thorough research and analysis beyond total return calculations to gain a comprehensive understanding of a digital currency's potential.
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• Dec 17, 2021 · 3 years ago
  As a leading digital currency exchange, BYDFi understands the potential risks and drawbacks of relying solely on total return calculations for evaluating digital currencies. While total return calculations provide a useful metric for assessing the past performance of a digital currency, they do not capture the full picture of its future prospects. Market conditions, regulatory changes, and technological advancements can all significantly impact the value and viability of a digital currency. Therefore, it is important to consider a range of factors, including total return calculations, when evaluating digital currencies to make informed investment decisions.
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