What role does the interaction of supply and demand play in determining the prices of digital currencies?

1 answers

• Dec 25, 2021 · 3 years ago
  In the world of digital currencies, the interaction between supply and demand plays a crucial role in determining their prices. When the demand for a digital currency exceeds its supply, the price tends to rise. This is because more people are willing to buy the digital currency, but there are limited units available. On the other hand, when the supply of a digital currency exceeds the demand, the price tends to fall. This is because there are more units available, but fewer people are interested in buying. Therefore, the balance between supply and demand is essential for understanding the price movements of digital currencies.
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