Risk-Adjusted Return measures the return of an investment adjusted for its risk. In the cryptocurrency space, this concept is crucial due to the high volatility and unpredictable nature of digital assets.To calculate this metric, investors often use ratios like the Sharpe Ratio, which compares the excess return of an asset to its volatility. A higher ratio indicates a more favorable return per unit of risk taken. This helps investors understand whether higher returns are offset by higher risks.For instance, if two cryptocurrencies offer similar returns but one has significantly high volatility, the risk-adjusted return will highlight that the riskier asset may not be a better investment after accounting for the potential downsides.By focusing on risk-adjusted returns, investors can make informed decisions, choosing assets that align better with their risk tolerance and investment goals. This approach encourages a more thoughtful evaluation rather than solely chasing high returns.