How does the efficient market hypothesis proposed by Eugene Fama apply to the valuation of cryptocurrencies?

1 answers

• Nov 28, 2021 · 3 years ago
  According to the efficient market hypothesis proposed by Eugene Fama, the valuation of cryptocurrencies is influenced by the collective actions of market participants. The hypothesis suggests that the market prices of cryptocurrencies already reflect all available information, making it difficult to consistently outperform the market. This means that it is challenging to predict the future value of cryptocurrencies based on historical data or any other form of analysis. However, it's important to note that the cryptocurrency market is still relatively new and highly volatile, which may challenge the efficiency of the market in the short term. Overall, the efficient market hypothesis provides insights into the dynamics of the cryptocurrency market and the complexities of valuing digital assets.
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