Risk aggregation refers to the process of identifying, measuring, and combining various risks associated with holding multiple cryptocurrencies or engaging in different trading activities. In practice, this involves assessing how these risks interact and influence overall exposure. Since cryptocurrencies can be highly volatile and correlated, understanding these connections helps investors make informed decisions about portfolio management and risk exposure.For instance, if an investor holds several cryptocurrencies that respond similarly to market changes, their overall risk may be higher than anticipated. By aggregating risks, one can develop strategies to hedge against negative outcomes or optimize returns based on a clearer understanding of potential vulnerabilities.Risk aggregation is vital for developing a balanced portfolio that aligns with an investor’s risk tolerance and investment goals. It also serves as a basis for risk mitigation strategies, enabling informed choices about asset allocation and diversification. This analytical approach helps navigate the complexities of the market and enhances the decision-making process.