Market Efficiency Levels

Market efficiency is categorized into three levels: weak, semi-strong, and strong, based on what information is reflected in prices. Weak form efficiency assumes all past price data is reflected, while semi-strong includes all public information.

Strong form efficiency posits that all information, public and private, is incorporated into the price. Cryptocurrencies are often analyzed to see which level they occupy, with many observers arguing they struggle to reach even weak form efficiency due to market immaturity.

Recognizing these levels helps investors understand the limits of technical and fundamental analysis. It frames the debate on whether an asset can be consistently valued correctly.