Basis points, abbreviated as BPS, are a common unit of measurement used to quantify changes in interest rates, prices, or other financial percentages. One basis point is equal to one-hundredth of a percentage point, or 0.01%.

In the context of trading or investing, particularly with assets like cryptocurrencies, basis points help communicate small shifts in values without ambiguity. For example, if the interest on a crypto savings account rises from 5.00% to 5.25%, this change can be described as an increase of 25 basis points. Using basis points reduces confusion that can arise from percentage point changes, especially when discussing minor variations.

It enables investors and analysts to make clear comparisons and understand fluctuations in yields, fees, or pricing with precision. Overall, the term plays a crucial role in making financial discussions more precise, allowing for better decision-making in investment strategies.