Mukul AhluwaliaNov 23, 2021 · 3 years ago4 answersHow do bank runs affect the value of digital currencies?
Bank runs can have a significant impact on the value of digital currencies. During a bank run, depositors rush to withdraw their funds from a bank due to concerns about the bank's solvency. This can lead to a loss of confidence in the banking system and a decrease in the value of traditional currencies. In the case of digital currencies, bank runs can also cause a decline in their value. However, the impact may be different depending on the specific digital currency and its underlying technology. How exactly do bank runs affect the value of digital currencies?
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