How does the fred fed funds rate affect the value of digital currencies?
breezDec 26, 2021 · 3 years ago1 answers
Can you explain how the fred fed funds rate impacts the value of digital currencies? I'm curious to know if there is a direct correlation between the two and how it affects the overall market.
1 answers
- Dec 26, 2021 · 3 years agoThe fred fed funds rate can indirectly affect the value of digital currencies. When the fed funds rate increases, it can lead to higher interest rates on loans, which can reduce consumer spending and investment. This can have a negative impact on the overall economy and potentially lower the value of digital currencies. However, it's important to note that the value of digital currencies is also influenced by a variety of other factors, such as market demand, technological advancements, and regulatory developments. While the fred fed funds rate can play a role, it is just one piece of the puzzle in understanding the value of digital currencies.
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