Definition ∞ Reduced market risk refers to a decrease in the potential for financial loss associated with trading or holding digital assets. This can result from factors such as increased market liquidity, clearer regulatory guidance, improved security measures, or decreased price volatility. Lower risk typically encourages broader institutional and retail participation in the crypto market.
Context ∞ As the digital asset market matures, discussions around reduced market risk become more prominent, attracting traditional financial institutions. News often covers regulatory developments, technological advancements, and market infrastructure improvements that contribute to a safer and more predictable trading environment.
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