How does the growth of m1 money supply influence investor sentiment towards cryptocurrencies?

3 answers

• Huy TrươngDec 17, 2023 · 2 years ago
  The growth of m1 money supply can have a significant impact on investor sentiment towards cryptocurrencies. When the m1 money supply increases, it often leads to an increase in liquidity in the economy. This increased liquidity can flow into the cryptocurrency market, driving up prices and creating a positive sentiment among investors. On the other hand, a decrease in m1 money supply can lead to a decrease in liquidity, which may result in a negative sentiment towards cryptocurrencies as investors become more cautious and risk-averse.
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• Bearcin46May 26, 2021 · 4 years ago
  The growth of m1 money supply and its influence on investor sentiment towards cryptocurrencies can be explained by the concept of inflation. When the m1 money supply increases rapidly, it can lead to inflationary pressures in the economy. This inflation erodes the purchasing power of fiat currencies, making cryptocurrencies an attractive alternative for investors seeking to preserve the value of their assets. As a result, the growth of m1 money supply can contribute to a positive investor sentiment towards cryptocurrencies.
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• Roman StrakhovJun 14, 2025 · a month ago
  According to a study conducted by BYDFi, a digital currency exchange, the growth of m1 money supply has a direct impact on investor sentiment towards cryptocurrencies. The study found that when the m1 money supply expands, there is an increase in the number of investors entering the cryptocurrency market. This influx of new investors creates a positive sentiment and can drive up the prices of cryptocurrencies. Conversely, when the m1 money supply contracts, it can lead to a decrease in investor confidence and a decline in cryptocurrency prices.
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