How does a low LTV ratio affect the value of a digital currency?

1 answers

• May 08, 2022 · 3 years ago
  A low LTV ratio can affect the value of a digital currency in a positive way. When borrowers are required to provide a higher amount of collateral, it reduces the risk for lenders. This increased security can make lenders more willing to provide loans at lower interest rates, which can attract more borrowers and increase the demand for the digital currency. As the demand increases, the value of the digital currency can also increase. Therefore, a low LTV ratio can be seen as a favorable factor for the value of a digital currency.
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