Alpha

In the context of cryptocurrencies, "Alpha" refers to the excess return of an investment relative to the return of a benchmark index. It is a measure of the investment's performance compared to the market as a whole, after adjusting for risk.

Example:

Suppose an investor's cryptocurrency portfolio returns 15% over a certain period, while the benchmark index returns 10% over the same period. The alpha of the investor's portfolio would be +5% (15% return - 10% benchmark return).

Case:

Let's consider a cryptocurrency hedge fund that consistently outperforms the market benchmark, such as Bitcoin's performance. If the hedge fund achieves a return of 25% over the year, while Bitcoin only returns 15% over the same period, the fund's alpha would be +10%. This indicates that the hedge fund's strategies and management have generated additional returns beyond what could be achieved by simply holding Bitcoin.