- Communication Science - Applying data science and communication theory to analyze public and financial discourse about blockchain and crypto markets.
- Halving Cycle - An event where the reward for mining bitcoins is cut in half. Halvings are typically associated with intense boom and bust cycles that end with higher prices than before the event, although the impact of halving diminishes as the block reward approaches zero.
- MVRV Z-Score - Uses market value, realized value and Z-score to identify periods where bitcoin is extremely over or undervalued relative to its ‘fair value.’ When bitcoin price is in the upper band, it may need to pull back and after spending time in the lower band it may rally.
- On-chain - Transactions that occur on the blockchain. On-chain metrics turn blockchain-based transaction data into actionable crypto market insights. Examples of on-chain metrics include: transaction volumes, miner outflows, active addresses and hashrate.
- NVT (Network Value to Transactions Ratio) - Describes the relationship between market capitalization and transfer volumes. With NVT users can see the balance between bitcoin’s two primary value propositions: store of value (market cap) and settlement/payments network (transfer volume). A high NVT ratio indicates investors are pricing bitcoin at a premium, a low ratio indicates investors are pricing bitcoin at a discount and a constant ratio indicates the current growth trend of both market cap and transfer volume are in equilibrium.
- Stock to Flow - Ratio of the current stock of a circulating cryptocurrency supply and the flow of newly minted coins. Stock to flow assumes scarcity drives value and is used to predict the future price of crypto assets.
- Annualized Rate of Return - The equivalent annual return an investor receives over a given period, expressed as a percent.
- Commodity - A basic staple or raw material used to manufacture finished goods e.g. oil or wheat. Commodities can be bought and sold on specialized exchanges as financial assets, or on derivatives markets.
- Consumer Price Index - Weighted average of prices for a basket of goods and services. Measures monthly changes in prices paid by consumers and indicates inflation and deflation.
- Consumer Sentiment - A measurement of the overall health of the economy according to consumer opinion. For instance, people’s feelings toward their financial health, short-term economic health and the prospects for longer-term economic growth.
- Downside Risk - The potential loss that can result from a fall in price of an asset as a result of changing market conditions. Refers to the probability that an asset or security will fall in price. Downside risk is in contrast to upside potential which is the likelihood that an asset or security’s value will increase.
- Drawdown - How much an investment, trading account or fund has fallen from its peak to trough. Drawdown is measured over a specific period, between two distinct dates and is expressed in dollar amounts or as a percentage. For example, if you invest $10,000 in Bitcoin, volatility could see your account dip to $9,000, but a previous uptrend pushed your account to its peak at $12,000. The drawdown measured from the account peak is then $3,000 or 25%.
- Federal Funds Rate - Interest rate set by the Federal Reserve to indirectly manage interest rates, inflation and unemployment. It is the rate at which commercial banks borrow and lend their excess reserves to each other and is set eight times a year. It can influence short-term rates on consumer loans and credit cards.
- Gross Domestic Product - The total monetary or market value of all the finished goods and services produced within a country’s borders in a specific period of time. It functions as a proxy for a country’s overall economic health.
- Hierarchial Risk Parity - Uses unsupervised machine learning to cluster assets in such a way that each cluster contributes an equal amount of risk (volatility) to the portfolio
- Inverse Volatility - A portfolio strategy where risk is measured with volatility and assets are weighted in inverse proportion to their risk. Assets that are more volatile receive lower weights.
- Liquidity - The relative ease in which things can be bought or sold. For example, public stock is more liquid than private securities. Liquidity indicates whether there will be a short-term inability to satisfy debts or make agreements whole.
- Maximum Drawdown - The biggest percentage drop in value that a trading system has experienced from its previous highest point to its subsequent lowest point.
- Money Supply - Total amount of cash and cash equivalents such as savings accounts that is circulating in an economy at a given time. Money supply is a key factor in analyzing the health of an economy and developing policies to mitigate inflation and deflation.
- Mortgage Rate - Rate of interest charged on a mortgage, either fixed or variable. Rate averages rise and fall with interest rate cycles and can drastically affect the housing market.
- Real Interest Rate - Interest rate adjusted to remove effects of inflation. Real interest rate is a reflection of the change in purchasing power derived from an investment or given up by the borrower.
- Rebalancing - Periodically buying or selling the assets in a portfolio to regain and maintain the original, desired level of asset allocation. Levels are intended to match an investor's tolerance for risk and desire for reward.
- Risk Parity - A portfolio allocation strategy that uses risk to determine allocations across various components of an investment portfolio. The main idea of the risk parity strategy is that all assets in the portfolio contribute in the same proportion to the risk of the portfolio.
- Sharpe Ratio - Measures risk-adjusted relative returns, calculated by comparing its return to that of a risk-free asset. SR describes how much excess return you receive for the extra volatility you endure for holding a riskier asset. Excess returns over a period of time may signify more volatility and risk, rather than investing skill. Generally, a SR between 1 and 2 is good, between 2 and 3 is very good and higher than 3 is excellent.
- S&P 500 - Features 500 leading U.S. publicly traded companies with an emphasis on market capitalization. It is used to gauge equities’ and stock market performance overall.
- Standard Deviation - Measures how widely prices are dispersed from the average price, indicating market volatility. If prices trade in a narrow range, SD will be low and indicate low volatility. Conversely, if prices swing up and down, SD will be high and indicate high volatility.
- TLT (iShares 20+ Year Treasury Bond ETF) - Tracks the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than 20 years. Treasuries typically outperform during downturns, recessions and equity bear markets and act as equity hedges.
- Uniform - Allocates equal weights to each asset in a portfolio.
- Unemployment Rate - Proportion of the labour force that is not currently employed but could be.This rate rises and falls in the wake of economic conditions.
- VIX - Measures a 30-day expected volatility of the U.S. stock market derived from the S&P 500. It is used as a global indicator of volatility.
- Yield Curve - A line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates such as three-month, two-year, five-year, 10-year and 30-year U.S. Treasury debt. The slope can indicate future interest changes and economic activity. For example, a steep yield curve implies strong economic growth in the future, which is often accompanied by higher inflation and therefore higher interest rates.