Definition ∞ ‘Risk-on’ describes a market sentiment characterized by investor willingness to take on higher levels of risk in pursuit of greater returns. During such periods, capital tends to flow into more speculative assets, including growth stocks and, in the digital asset space, cryptocurrencies and other volatile digital instruments. This sentiment is often driven by positive economic indicators or a general sense of market optimism.
Context ∞ The concept of ‘risk-on’ sentiment is a key indicator for understanding capital flows within financial markets, including the cryptocurrency ecosystem. News coverage frequently analyzes how macroeconomic factors influence this sentiment and, consequently, the price movements of digital assets. The current discourse often involves predicting shifts in risk appetite and their potential impact on asset valuations.
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