{"slug":"beta","term":"Beta","category":"Quant & Stats","definition":"Beta measures how much an asset moves relative to a benchmark — in crypto, usually Bitcoin. A beta of 2 means the coin tends to move 2% for every 1% Bitcoin move, in both directions. High-beta alts amplify gains in uptrends and losses in downtrends, so beta shows how much Bitcoin risk a position really carries.","street":"High beta means your alt pumps harder than BTC on green days and bleeds harder on red ones — pick your poison.","depth":["Beta comes from regressing a coin's returns on the benchmark's over a lookback window: covariance divided by the benchmark's variance. Against BTC, majors typically print 1 to 1.5, mid-caps 1.5 to 2.5, small caps can run 3+. A beta of 2 means a 4% BTC dip statistically maps to an 8% hit on your coin. It drifts with regime, so measure it on the timeframe you actually trade, not a one-year average.","The costly misread: buying a 2.5-beta alt near a local top is taking leveraged BTC exposure without calling it that — no funding paid, but the drawdown math is the same. Downside beta in alts also tends to run hotter than upside beta, because order books thin out in dumps. The playable edge is rotation: high beta when BTC confirms an uptrend and dominance rolls over, back to BTC or stables when the trend stalls. Beta is a throttle, not a personality trait."],"live":{"label":"Check BTC strength before buying beta","href":"/tools/btc-strength"},"related":["correlation","btc-dominance","alt-season","leverage"]}