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How does the release of CPI affect the price of digital currencies?

avatarEbbesen BagerDec 25, 2021 · 3 years ago1 answers

Can you explain how the release of CPI (Consumer Price Index) affects the price of digital currencies? What is the relationship between CPI and the value of cryptocurrencies?

How does the release of CPI affect the price of digital currencies?

1 answers

  • avatarDec 25, 2021 · 3 years ago
    At BYDFi, we believe that the release of CPI can have a significant impact on the price of digital currencies. As inflation erodes the value of traditional fiat currencies, investors often seek alternative stores of value, such as digital assets. This increased demand can drive up the price of cryptocurrencies. Furthermore, if the CPI release indicates higher inflation than expected, it may lead to a loss of confidence in traditional financial systems, prompting individuals to explore decentralized and inflation-resistant digital currencies. However, it's important to conduct thorough research and consider other factors before making investment decisions in the digital currency market.