Analyzing the Risk and Return Trade-offs in 
Cryptocurrency Investments Abstract

Zijia Liu

doi:10.70711/memf.v2i4.5380

Analyzing the Risk and Return Trade-offs in Cryptocurrency Investments Abstract

Zijia Liu

Abstract

The cryptocurrency market has gained significant attention in recent years due to its potential for high returns and its unique risk
profile. This paper explores the risk-return trade-offs in cryptocurrency investments, analyzing the factors that influence the risk and return
dynamics, the volatility of cryptocurrency assets, and the role of cryptocurrencies in investment portfolios. We examine the risk factors such
as market volatility, regulatory uncertainty, and technological vulnerabilities, and how these impact investor behavior and decision-making.
Additionally, we explore the relationship between cryptocurrencies and traditional assets, highlighting the potential diversification benefits.
Finally, the paper discusses investment strategies that may help mitigate risks while maximizing returns, and concludes with a discussion on
the future of cryptocurrency as a mainstream investment option.

Keywords

Cryptocurrency; Risk-Return Trade-off; Volatility; Investment Portfolio; Diversification

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DOI: http://dx.doi.org/10.70711/memf.v2i4.5380

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