How do fiscal and monetary policies influence the volatility of digital assets?

1 answers

• Lewis WeeksDec 08, 2024 · 8 months ago
  As an expert in the field of digital assets, I can confidently say that fiscal and monetary policies have a significant impact on their volatility. When governments implement expansionary fiscal policies, it can stimulate economic growth and increase investor confidence, leading to a decrease in digital asset volatility. On the other hand, contractionary fiscal policies can have the opposite effect, increasing volatility. Monetary policies, such as interest rate adjustments, can also influence digital asset volatility. Lower interest rates can make digital assets more attractive, reducing volatility, while higher interest rates can lead to a decrease in demand and increased volatility. It's important for investors to closely monitor fiscal and monetary policies as they can greatly affect the volatility of digital assets.
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