Which cryptocurrencies are most affected by fluctuations in the value of the US dollar?

3 answers

• Dec 28, 2021 · 3 years ago
  The value of the US dollar can have a profound impact on cryptocurrencies. Cryptocurrencies that are closely tied to the US dollar, such as stablecoins like Tether (USDT) and USD Coin (USDC), are directly affected by fluctuations in the value of the US dollar. These stablecoins are designed to maintain a 1:1 ratio with the US dollar, so any changes in the value of the US dollar will directly impact their value. Other cryptocurrencies, such as Bitcoin and Ethereum, are also influenced by the value of the US dollar, but to a lesser extent. While they may not be directly tied to the US dollar, changes in the value of the US dollar can still affect investor sentiment and overall market trends, which in turn can impact the value of these cryptocurrencies.
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• Dec 28, 2021 · 3 years ago
  When the value of the US dollar decreases, cryptocurrencies like Bitcoin and Ethereum tend to see an increase in value. This is because investors often view cryptocurrencies as a hedge against traditional fiat currencies, including the US dollar. As the value of the US dollar depreciates, investors may turn to cryptocurrencies as a store of value and a potential investment opportunity. On the other hand, when the value of the US dollar strengthens, cryptocurrencies may experience a decline in value as investors shift their focus back to traditional fiat currencies. It's important to note that the relationship between the value of the US dollar and cryptocurrencies is complex and can be influenced by various factors, including global economic conditions, market sentiment, and regulatory developments.
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• Dec 28, 2021 · 3 years ago
  At BYDFi, we've observed that cryptocurrencies with smaller market capitalizations and lower trading volumes are often more susceptible to fluctuations in the value of the US dollar. This is because these cryptocurrencies tend to have less liquidity and are more easily influenced by market trends. Additionally, cryptocurrencies that are primarily traded against the US dollar on major exchanges are more likely to be affected by fluctuations in the value of the US dollar. However, it's important to remember that the cryptocurrency market is highly volatile, and the value of any cryptocurrency can be influenced by a wide range of factors, not just the value of the US dollar.
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