How does the nominal rate affect the value of cryptocurrencies?

1 answers

• Keller ConleyJul 09, 2023 · 2 years ago
  As an expert in the cryptocurrency industry, I can confirm that the nominal rate does have an impact on the value of cryptocurrencies. When the nominal rate rises, it becomes more attractive for investors to allocate their funds to traditional assets that offer a guaranteed return. This can result in a decrease in demand for cryptocurrencies, leading to a potential decrease in their value. Conversely, when the nominal rate decreases, cryptocurrencies may become more appealing as they offer the potential for higher returns compared to traditional investments. This increased demand can drive up the value of cryptocurrencies. So, it's important to consider the influence of the nominal rate when analyzing the value of digital currencies.
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