How Uncertainty and Conditional Beta Shape Crypto Prices

Ever wondered what really influences the price of cryptocurrencies? Researchers have found that using a conditional beta, instead of the fixed beta used in previous studies, can make pricing models more accurate. Conditional beta changes over time, reflecting real-time market conditions. This new approach promises to explain price movements better than before.What's really interesting is that this study also includes an "uncertainty factor" — something earlier research missed. Uncertainty plays a big role in how investors feel and act. When there's a lot of uncertainty, people might buy or sell based on their emotions, which affects prices. So, why is this important? Understanding how uncertainty and changing betas work together can help us predict crypto prices more effectively. It's like looking at a map with clearer directions — it helps you navigate the ups and downs of the cryptocurrency market more confidently.