Beta (altcoin beta)

Beta is calculated by regressing an asset's returns against a benchmark's returns. A beta of 1 means the asset moves in line with the benchmark, 2 means it tends to move twice as much, and below 1 means less. In crypto the benchmark is usually bitcoin or the total market; in traditional finance it is a stock index, against which bitcoin itself has shown a beta above 1.

Traders talk about altcoin beta when expecting a rally: if bitcoin rises 10%, a high-beta token might rise 20% or 30%. That is why money tends to rotate into smaller, more speculative tokens during strong markets. The same leverage works in reverse, and in selloffs high-beta coins usually fall harder and recover more slowly.

Beta mixes two things: how correlated the asset is with the benchmark and how volatile it is. It changes over time and can be distorted by token unlocks or project news. A high beta describes sensitivity, not quality or expected return.