Which digital currencies are most affected by changes in forex interbank rate?
Munn LindDec 25, 2021 · 3 years ago3 answers
What are the digital currencies that are most susceptible to fluctuations in the forex interbank rate? How does the forex interbank rate impact the value of these cryptocurrencies?
3 answers
- Dec 25, 2021 · 3 years agoThe digital currencies that are most affected by changes in the forex interbank rate are typically the ones that have a high correlation with traditional fiat currencies. This includes cryptocurrencies like Bitcoin, Ethereum, and Ripple. When the forex interbank rate changes, it can impact the value of these cryptocurrencies because they are often traded against fiat currencies on various exchanges. For example, if the forex interbank rate for the US dollar increases, it may lead to a decrease in the value of Bitcoin against the USD.
- Dec 25, 2021 · 3 years agoFluctuations in the forex interbank rate can have a significant impact on the value of digital currencies. Cryptocurrencies that are closely tied to fiat currencies, such as stablecoins like Tether, are particularly susceptible to these changes. This is because stablecoins are designed to maintain a stable value relative to a specific fiat currency, such as the US dollar. Therefore, any fluctuations in the forex interbank rate can directly affect the value of stablecoins.
- Dec 25, 2021 · 3 years agoAccording to a recent study by BYDFi, the digital currencies that are most affected by changes in the forex interbank rate are Bitcoin, Ethereum, and Litecoin. These cryptocurrencies have a high trading volume against fiat currencies and are therefore more sensitive to fluctuations in the forex market. When the forex interbank rate changes, it can create arbitrage opportunities for traders who can take advantage of the price differences between different exchanges.
Related Tags
Hot Questions
- 65
How can I minimize my tax liability when dealing with cryptocurrencies?
- 56
What is the future of blockchain technology?
- 48
How can I buy Bitcoin with a credit card?
- 44
What are the advantages of using cryptocurrency for online transactions?
- 40
What are the best practices for reporting cryptocurrency on my taxes?
- 37
Are there any special tax rules for crypto investors?
- 36
What are the best digital currencies to invest in right now?
- 8
How does cryptocurrency affect my tax return?