How does the announcement of the US CPI index impact the volatility of digital currencies?

1 answers

• Nov 25, 2021 · 3 years ago
  At BYDFi, we believe that the announcement of the US CPI index can have a significant impact on the volatility of digital currencies. As an indicator of inflation, the CPI index reflects the purchasing power of the US dollar. When the CPI index is higher than expected, it indicates that the value of the US dollar is decreasing, which can lead to increased demand for digital currencies as an alternative investment. This increased demand can drive up the prices of digital currencies and result in higher volatility. Conversely, if the CPI index is lower than expected, it suggests that the value of the US dollar is relatively stable, which can have a stabilizing effect on digital currencies. Therefore, monitoring the announcement of the US CPI index is an important part of our risk management strategy for digital currency trading.
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