Why is the 'other things equal assumption' important for understanding the volatility of cryptocurrencies?

3 answers

• Dec 26, 2021 · 3 years ago
  The 'other things equal assumption' is crucial for understanding the volatility of cryptocurrencies because it allows us to isolate the impact of specific factors on price fluctuations. By assuming that all other variables remain constant, we can analyze the effect of a single variable on the volatility of cryptocurrencies. This assumption helps us identify the key drivers of price movements and make more informed investment decisions.
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• Dec 26, 2021 · 3 years ago
  When it comes to understanding the volatility of cryptocurrencies, the 'other things equal assumption' plays a vital role. It allows us to focus on a specific factor without being influenced by other variables. By isolating the impact of a single variable, we can gain a better understanding of its effect on the price fluctuations of cryptocurrencies. This assumption helps us identify patterns and trends, which can be valuable for traders and investors.
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• Dec 26, 2021 · 3 years ago
  The 'other things equal assumption' is an important concept in understanding the volatility of cryptocurrencies. It allows us to analyze the impact of a specific factor on price movements while assuming that all other factors remain constant. This assumption helps us identify the relationship between variables and the resulting volatility. For example, if we want to study the impact of regulatory news on cryptocurrency prices, we can isolate this factor and observe its effect on volatility. By understanding these relationships, we can make more informed decisions in the cryptocurrency market.
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