How does the SOFR overnight rate affect digital asset prices?

1 answers

• Aaron SamJan 24, 2024 · 2 years ago
  The relationship between the SOFR overnight rate and digital asset prices is complex and multifaceted. While the SOFR rate itself may not directly determine the prices of digital assets, it can influence market sentiment and investor behavior. When the SOFR rate rises, it can signal a tightening of monetary policy and higher borrowing costs, which may lead to a decrease in demand for digital assets. Conversely, when the SOFR rate decreases, it can indicate looser monetary conditions and lower borrowing costs, potentially attracting investors to digital assets and driving up their prices. It's important to consider the SOFR overnight rate as one of many factors that can impact the prices of digital assets in the market.
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