How can the current SOFR rate impact the value of digital currencies?

1 answers

• Jan 13, 2022 · 3 years ago
  As a representative benchmark for short-term interest rates, the current SOFR rate can influence the value of digital currencies. When the SOFR rate rises, it indicates tighter monetary conditions and higher borrowing costs, which can reduce the attractiveness of digital currencies as an investment option. This can lead to a decrease in demand and a potential decline in their value. Conversely, when the SOFR rate decreases, it signals looser monetary conditions and lower borrowing costs, which can make digital currencies more appealing to investors. This increased demand can drive up the value of digital currencies.
  623312