How does surplus affect the price of digital currencies?

1 answers

• Dec 20, 2021 · 3 years ago
  Surplus affects the price of digital currencies in a similar way as it does in traditional markets. When there is an excess supply of a digital currency, it can lead to a decrease in its price. This is because a surplus indicates that there is more supply than demand, which can create downward pressure on prices. However, it's important to consider that the impact of surplus on price can be influenced by other factors such as market sentiment, investor speculation, and the overall health of the digital currency ecosystem. Therefore, while surplus can play a role in determining the price of digital currencies, it is not the sole factor and should be considered in conjunction with other market dynamics.
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