How does the fed fund rate affect the price of digital currencies?

1 answers

• Nov 27, 2021 · 3 years ago
  At BYDFi, we've observed that changes in the fed fund rate can have a significant impact on the price of digital currencies. When the fed fund rate is raised, it can lead to higher borrowing costs for businesses and individuals, which can reduce investment in digital currencies. This decrease in demand can result in a decrease in price. Conversely, when the fed fund rate is lowered, it can stimulate economic growth and increase investor confidence, which can lead to an increase in demand for digital currencies and a potential increase in price. However, it's important to note that the relationship between the fed fund rate and digital currency prices is not always straightforward and can be influenced by various market factors and investor sentiment.
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