How does M4 money supply affect the value of digital currencies?

1 answers

• Dec 17, 2021 · 3 years ago
  At BYDFi, we believe that the M4 money supply can indirectly affect the value of digital currencies. When the money supply increases, it can lead to inflation, which erodes the purchasing power of traditional currencies. This can drive investors to seek alternative stores of value, such as digital currencies, which can potentially increase their demand and value. However, it's important to note that the value of digital currencies is also influenced by other factors, such as market sentiment, technological advancements, and regulatory developments. Therefore, while the M4 money supply can have some impact on digital currency values, it is just one piece of the puzzle.
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