How does real v nominal GDP affect the value of digital currencies?

1 answers

• Mar 06, 2022 · 3 years ago
  Real v nominal GDP can have a significant impact on the value of digital currencies. When real GDP is growing faster than nominal GDP, it indicates that the economy is experiencing real economic growth. This can lead to increased investor confidence and a higher demand for digital currencies, which can drive up their value. On the other hand, if nominal GDP is growing faster than real GDP, it suggests that inflation is outpacing economic growth. This can erode the purchasing power of fiat currencies and lead to a decrease in demand for digital currencies, which can lower their value. Therefore, understanding the relationship between real and nominal GDP is crucial for evaluating the value of digital currencies.
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