Alpha
In the cryptocurrency space, ‘alpha’ refers to ‘insider info’ (i.e., an essential piece of new or unknown information that can be used for trading). Crypto influencers often promise their followers alpha on their channels.
In some instances for both crypto and traditional financial (TradFi) markets, alpha is also known as a metric that measures how successful an investment is in outperforming the market or achieving higher returns than expected based on its risk profile. In essence, it is the excess return generated by an investment strategy or portfolio compared to the overall market return, often represented by a benchmark index.
Key Takeaway
Crypto 'alpha' refers to a piece of information that is new or not common knowledge and has the potential to give a trader an edge in the market. In some circles, it is also a metric that measures how successful an investment is in outperforming the market.