What is the impact of Cantillon effect on the value of cryptocurrencies?

1 answers

• Abhijith Nair HFeb 15, 2025 · 7 months ago
  The Cantillon effect can have a significant impact on the value of cryptocurrencies. When new money is injected into the economy, it often benefits certain individuals or institutions first. These early beneficiaries may choose to invest their newfound wealth in cryptocurrencies, which can drive up the demand and subsequently increase the value of these digital assets. However, if the newly created money primarily benefits a small group of individuals, it can lead to wealth inequality and a concentration of cryptocurrency ownership. This concentration of ownership can create a volatile market and potentially lead to price manipulation. Therefore, it is important to consider the Cantillon effect when analyzing the value of cryptocurrencies and the potential risks associated with wealth concentration.
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