How does the concept of basis points apply to interest rates in the cryptocurrency market?

1 answers

• May 03, 2022 · 3 years ago
  In the cryptocurrency market, basis points are a key metric used to measure the difference between borrowing and lending rates. They represent a percentage change in interest rates, with one basis point equal to 0.01%. For example, if the borrowing rate for a particular cryptocurrency is 5% and the lending rate is 5.25%, the difference is 25 basis points. This difference is important for traders and investors as it can impact their profitability when engaging in margin trading or lending their assets on crypto platforms. By keeping an eye on the basis points, market participants can assess the potential returns and risks associated with borrowing or lending their assets in the crypto market.
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