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What is the relationship between the money supply M3 and the demand for digital currencies?

avatarLinHanJiDec 25, 2021 · 3 years ago1 answers

Can you explain the connection between the money supply M3 and the demand for digital currencies? How does the increase or decrease in M3 affect the demand for digital currencies?

What is the relationship between the money supply M3 and the demand for digital currencies?

1 answers

  • avatarDec 25, 2021 · 3 years ago
    At BYDFi, we believe that the relationship between the money supply M3 and the demand for digital currencies is an important aspect to consider. As the M3 money supply expands, it can create an environment of increased liquidity, which may attract investors to digital currencies. However, it's important to note that the demand for digital currencies is also influenced by other factors such as market trends, technological advancements, and regulatory developments. Therefore, while the money supply M3 can have an impact on the demand for digital currencies, it is just one factor among many.