How does adjusted SOFR affect the trading volume of digital currencies?

1 answers

• Jan 06, 2022 · 3 years ago
  The adjusted SOFR is an important metric that can impact the trading volume of digital currencies. As a benchmark interest rate, it reflects the cost of borrowing cash overnight collateralized by Treasury securities. When the adjusted SOFR increases, it indicates higher borrowing costs, which can discourage trading activity and potentially lead to a decrease in trading volume. Conversely, when the adjusted SOFR decreases, it indicates lower borrowing costs, which can incentivize market participants to engage in more trading and potentially increase trading volume. Therefore, fluctuations in the adjusted SOFR can have a direct impact on the trading volume of digital currencies.
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