Toncoin’s Sharpe Ratio Declines Indicating Lower Risk for Investors
Toncoin, a notable cryptocurrency in 2024, has been affected by the bearish market climate. Following a decline on October 26, Toncoin's price is currently approximately $4.92, reflecting a nearly 3% increase in one day. Despite this, the token's weekly performance shows a decline of about 7%, according to CoinGecko.
What Does The Declining Sharpe Ratio Mean?
Analyst Darkfost from CryptoQuant discussed the significance of the declining Sharpe Ratio for Toncoin. This metric evaluates risk-adjusted returns, indicating how much profit an investment yields per unit of risk, with risk measured by volatility.
A rising Sharpe Ratio typically indicates better risk-adjusted performance, while a downward trend suggests a "lower-risk zone" with diminished profit potential. Darkfost noted that decreasing volatility and risk for Toncoin imply a more favorable risk-return balance for investors.
This less volatile market may provide an opportunity for Toncoin investors to accumulate tokens with reduced exposure to sudden price changes. However, caution is advised, as this "lower-risk zone" may not guarantee safety. Darkfost also recommended monitoring Bitcoin’s price movements, as they significantly influence the broader market.
Toncoin To Overtake Ethereum In This Metric Before 2025
Another analyst projected that Toncoin might surpass Ethereum in adoption metrics by the end of 2024. Currently, Toncoin has 112 million holders, and if it continues gaining around 500,000 new holders daily, it could exceed Ethereum's 137 million holders by December 20, 2024.
However, this projection does not consider potential slowdowns in Toncoin's growth or the ongoing increase of Ethereum holders. These factors could affect the predicted timeline.
