How does M2 include M1 plus affect the value of digital currencies?

4 answers

• Mar 18, 2022 · 3 years ago
  When M2 includes M1 plus, it means that the broader measure of money supply includes not only the currency in circulation and demand deposits but also other types of deposits, such as savings accounts and time deposits. This expansion of the money supply can potentially increase the value of digital currencies. With more money available in the economy, there is a higher likelihood of individuals and institutions investing in cryptocurrencies, which can drive up their demand and subsequently their value. However, it's important to note that the value of digital currencies is influenced by various factors, including market sentiment, technological advancements, and regulatory developments.
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• Mar 18, 2022 · 3 years ago
  Including M1 plus in M2 has a positive effect on the value of digital currencies. The broader measure of money supply reflects the overall liquidity in the economy, and when there is more liquidity, it can lead to increased investment in digital currencies. As more individuals and institutions hold digital currencies, the demand for them increases, which can drive up their value. Additionally, the inclusion of M1 plus in M2 also indicates a higher level of economic activity, which can further contribute to the positive sentiment towards digital currencies.
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• Mar 18, 2022 · 3 years ago
  When M2 includes M1 plus, it signifies a broader measure of money supply that encompasses not only currency in circulation and demand deposits but also savings accounts and time deposits. This inclusion can have a significant impact on the value of digital currencies. As more money is included in the measure, it indicates a higher level of liquidity in the economy. This increased liquidity can lead to more investment in digital currencies, driving up their demand and value. However, it's important to consider other factors that can influence the value of digital currencies, such as market trends and regulatory changes.
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• Mar 18, 2022 · 3 years ago
  BYDFi, a leading digital currency exchange, explains that the inclusion of M1 plus in M2 can have a positive effect on the value of digital currencies. This broader measure of money supply reflects the overall liquidity in the economy, and when there is more liquidity, it can lead to increased investment in digital currencies. As more individuals and institutions hold digital currencies, the demand for them increases, which can drive up their value. Additionally, the inclusion of M1 plus in M2 also indicates a higher level of economic activity, which can further contribute to the positive sentiment towards digital currencies.
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