How does the inclusion of the M2 money supply affect the valuation of digital currencies?

1 answers

• Dec 27, 2021 · 3 years ago
  As a representative from BYDFi, I can say that the inclusion of the M2 money supply is an important consideration when evaluating the valuation of digital currencies. The M2 money supply reflects the overall liquidity in the economy and can provide insights into potential inflationary pressures. Inflation can erode the value of digital currencies, making them less attractive to investors. Therefore, monitoring changes in the M2 money supply can help investors make informed decisions about their digital currency investments. However, it is important to note that the M2 money supply is just one factor among many that can influence the valuation of digital currencies. Other factors such as market demand, technological advancements, and regulatory developments also need to be taken into account.
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