How does the 1m SOFR rate affect the interest rates of digital currencies?

1 answers

• Nov 26, 2021 · 3 years ago
  In the digital currency market, the 1-month SOFR rate influences the interest rates for borrowing and lending digital currencies. When the 1-month SOFR rate increases, it indicates tighter liquidity conditions and higher borrowing costs. As a result, the interest rates for digital currencies tend to rise. Conversely, when the 1-month SOFR rate decreases, it signals looser liquidity conditions and lower borrowing costs, leading to lower interest rates for digital currencies. The 1-month SOFR rate serves as a key reference rate for the digital currency market, providing insights into the overall interest rate environment. It is important for market participants to closely monitor the 1-month SOFR rate to make informed decisions regarding borrowing and lending digital currencies.
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