How does the interest rate that banks charge one another on overnight loans affect the trading volume of digital currencies?

1 answers

• Mar 06, 2022 · 3 years ago
  At BYDFi, we believe that the interest rate that banks charge each other on overnight loans can have a significant impact on the trading volume of digital currencies. When the interest rate is high, it becomes more expensive for banks to borrow money, which can lead to a decrease in trading volume as banks may be less willing to engage in trading activities. Conversely, when the interest rate is low, borrowing costs decrease, making it more attractive for banks to participate in the market. This can result in an increase in trading volume as banks are more likely to engage in trading activities. Therefore, it is important to consider the impact of the interest rate on overnight loans when analyzing the trading volume of digital currencies.
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