What impact did crack spread have on the cryptocurrency market in 2016?

1 answers

• clarkeheDec 16, 2023 · 2 years ago
  In 2016, the crack spread had a notable impact on the cryptocurrency market. The crack spread refers to the difference between the price of crude oil and the price of refined petroleum products. As the crack spread widened, it signaled higher production costs for oil refineries. This had a negative effect on the profitability of oil refineries and, consequently, on the demand for cryptocurrencies. Investors anticipated lower profits for oil refineries, which led to a decrease in demand for cryptocurrencies and a decline in prices. Conversely, when the crack spread narrowed, it indicated lower production costs for oil refineries. This increased the profitability of oil refineries and stimulated demand for cryptocurrencies, resulting in higher prices. Therefore, monitoring the crack spread was crucial for understanding the market trends and making informed investment decisions in 2016.
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