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How does m2 contribute to the valuation of digital assets?

avatarlingrdDec 27, 2021 · 3 years ago3 answers

In the context of digital assets, how does the m2 money supply contribute to their valuation? What is the relationship between m2 and the value of digital assets?

How does m2 contribute to the valuation of digital assets?

3 answers

  • avatarDec 27, 2021 · 3 years ago
    The m2 money supply plays a significant role in the valuation of digital assets. M2 represents the total amount of money in circulation, including cash, checking accounts, and savings deposits. As digital assets gain popularity and acceptance, the demand for them increases, leading to an increase in their value. The m2 money supply affects the overall liquidity in the market, and a higher m2 can indicate a higher purchasing power, which can positively impact the valuation of digital assets.
  • avatarDec 27, 2021 · 3 years ago
    When it comes to valuing digital assets, the m2 money supply is an important factor to consider. As the m2 money supply increases, it can lead to inflation and a decrease in the purchasing power of traditional currencies. This can drive investors towards digital assets as a store of value and hedge against inflation. The increased demand for digital assets can contribute to their valuation and potentially drive up their prices.
  • avatarDec 27, 2021 · 3 years ago
    BYDFi, a leading digital asset exchange, recognizes the significance of the m2 money supply in the valuation of digital assets. The m2 money supply reflects the overall economic conditions and the level of liquidity in the market. As BYDFi continues to provide a secure and reliable platform for trading digital assets, it takes into account various factors, including the m2 money supply, to ensure fair and accurate valuations for its users.