How did quantitative tightening in 2017 affect the value of cryptocurrencies?
Anmol TrivediDec 26, 2021 · 3 years ago1 answers
Can you explain how the implementation of quantitative tightening in 2017 impacted the value of cryptocurrencies?
1 answers
- Dec 26, 2021 · 3 years agoDuring the implementation of quantitative tightening in 2017, the value of cryptocurrencies experienced a notable decline. The reduction in liquidity and increased risk aversion caused by central banks tightening their monetary policy had a negative impact on the demand for cryptocurrencies. Investors shifted their focus towards more traditional assets, which led to a decrease in demand and subsequently, a decrease in value for cryptocurrencies. The tightening of monetary policy also resulted in higher interest rates, making cryptocurrencies less attractive compared to other investment options. Overall, the implementation of quantitative tightening in 2017 had a significant effect on the value of cryptocurrencies.
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