Price Risk

Price risk or market risk is the risk of a decline in the value of an asset, due to external factors or market conditions, during a period in which a financial contract is active. The risk of the asset declining must be factored into the contract's payment terms to hedge the risk of the asset.

Crypto assets are subject to extreme volatility and thus have extreme price risk, which makes them unsuitable as a medium of exchange or for denominating contracts in.


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