What is Risk-on / risk-off?
Whether investors are adding or removing risk; crypto usually trades as a risk asset.
In risk-on periods money flows to equities, high-yield credit and crypto. In risk-off it goes to cash, government bonds and the dollar.
Crypto's short-term correlation with equities is why a coin can fall on news that has nothing to do with the coin.
Related terms
- Interest rateMacro
The central-bank policy rate; higher rates tend to pull money out of risk assets.
- Liquidity cycleMacro
The broad expansion and contraction of money available to risk assets.
- Bitcoin dominanceBasics
Bitcoin's share of the total crypto market cap, used as a rough risk-appetite gauge.