What impact does the Japanese yen have on the volatility of Ethereum?

3 answers

• Dec 26, 2021 · 3 years ago
  The Japanese yen can have a significant impact on the volatility of Ethereum. As one of the most widely traded fiat currencies in the world, the yen's movements can influence the overall demand for cryptocurrencies, including Ethereum. When the yen strengthens against other major currencies, it can lead to increased buying power for Japanese investors, who may then allocate some of their funds towards cryptocurrencies like Ethereum. This increased demand can drive up the price of Ethereum and contribute to its volatility.
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• Dec 26, 2021 · 3 years ago
  The relationship between the Japanese yen and Ethereum's volatility is complex. While the yen is not directly tied to Ethereum, it is often used as a funding currency for carry trades in the foreign exchange market. Carry trades involve borrowing in a low-interest-rate currency (such as the yen) and investing in a higher-yielding asset (such as Ethereum). When carry trades are unwound, it can lead to significant fluctuations in both the yen and Ethereum. Therefore, changes in the yen's value can indirectly impact the volatility of Ethereum.
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• Dec 26, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, has observed that the Japanese yen can influence the volatility of Ethereum. The exchange has noticed that when there is a surge in yen-denominated trading volume, it often coincides with increased price movements in Ethereum. This suggests that the yen's fluctuations can have a notable impact on Ethereum's volatility. Traders and investors should consider monitoring the yen's performance and its potential effects on Ethereum's price fluctuations.
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