Why is the USD price often used as a benchmark for digital currencies?

3 answers

• Metro280Dec 15, 2023 · 2 years ago
  The USD price is commonly used as a benchmark for digital currencies because it is the most widely accepted and recognized currency in the world. By using the USD as a reference point, it allows for easy comparison and evaluation of the value of different digital currencies. Additionally, many digital currency exchanges primarily trade digital currencies against the USD, making it a natural choice for a benchmark. Overall, using the USD price as a benchmark provides a standardized and consistent way to assess the value of digital currencies.
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• Turko DurgoAug 05, 2021 · 4 years ago
  The USD price is often used as a benchmark for digital currencies because it provides stability and familiarity. The USD is a well-established currency with a long history of stability, making it a reliable reference point. Furthermore, many individuals and businesses are more familiar with the USD compared to other digital currencies, which makes it easier for them to understand and assess the value of digital currencies when compared to the USD. Therefore, using the USD price as a benchmark helps to provide a common frame of reference for discussing the value of digital currencies.
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• Alex FrostMar 21, 2024 · a year ago
  Using the USD price as a benchmark for digital currencies is a common practice in the industry. It allows for easy comparison and analysis of the value of different digital currencies. Many digital currency exchanges, including BYDFi, primarily trade digital currencies against the USD, which further solidifies its position as a benchmark. By using the USD price as a reference point, it also helps to reduce volatility and provide stability in the digital currency market. Overall, the USD price serves as a widely accepted benchmark that facilitates discussions and evaluations of digital currencies.
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