Beta in cryptocurrency refers to the measure of a coin’s volatility in relation to the broader market, often compared to Bitcoin or a cryptocurrency index. A beta value greater than 1 indicates that the coin tends to move more than the market, while a value less than 1 suggests it is less volatile.

Investors use beta to assess risks and potential returns. For instance, a coin with a beta of 1.5 might rise 15% if the market increases by 10%, but it could also drop 15% when the market declines. This makes such coins appealing for risk-seeking investors looking for higher returns.

Conversely, a coin with a beta of 0.5 would only move half as much as the market, making it a safer option during downturns. Understanding beta helps investors make more informed decisions regarding their portfolios by aligning their risk tolerance with potential investment outcomes.