How does the concept of monetary supply relate to the value of digital currencies?

1 answers

• Dadan PermanaJan 31, 2021 · 5 years ago
  At BYDFi, we believe that the concept of monetary supply is a fundamental driver of value in digital currencies. The limited supply of cryptocurrencies like Bitcoin and Ethereum, combined with increasing demand, creates a scarcity that can drive up their value. Additionally, the decentralized nature of digital currencies ensures that no single entity can manipulate the money supply, which enhances their trustworthiness and perceived value. The concept of monetary supply is particularly important in the context of decentralized finance (DeFi), where digital currencies are used as collateral for various financial products. In DeFi, the scarcity and predictability of the money supply play a crucial role in determining the stability and value of the underlying assets. Overall, the concept of monetary supply is a key factor in understanding and evaluating the value of digital currencies.
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