What are Diminishing Returns in Crypto?

in cryptocurrency •  2 years ago 

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📖The law of diminishing returns is “a principle stating that profits or benefits gained from something will represent a proportionally smaller gain as more money or energy is invested in it,” according to Oxford Languages.

💵Diminishing return is also a term used in economics to define the phenomenon where adding more will gives less return than before. The return on investment falls as its size increases.

💰Simply put, if you want to make more money, you must invest more. As your investment grows, the returns on that investment will be smaller and smaller.

📉For example, you put $1,000 into a cryptocurrency portfolio and get 10% back, but if you keep putting in more money, you will get less return each time. That is a problem because what happens when you only invest in one place?

📑It might help to limit the diminishing long-term returns of investors by diversification. Diversification is one of the investor’s strategies that offers safety by easing the shocks that can afflict certain assets.

📰If you are interested to learn more about “What are Diminishing Returns in Crypto?” read our full blog article here: https://bit.ly/3S2X6IR

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