What are the correlations between the dollar index and the market capitalization of digital currencies?

3 answers

• May 05, 2022 · 3 years ago
  The dollar index and the market capitalization of digital currencies have an inverse relationship. When the dollar index goes up, the value of digital currencies tends to go down. This is because a stronger dollar makes digital currencies relatively more expensive for investors. On the other hand, when the dollar index goes down, the value of digital currencies tends to go up, as they become relatively cheaper for investors.
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• May 05, 2022 · 3 years ago
  The correlation between the dollar index and the market capitalization of digital currencies is not always straightforward. While there is a general trend of an inverse relationship, other factors such as market sentiment, economic indicators, and geopolitical events can also influence the value of digital currencies. Therefore, it is important to consider multiple factors when analyzing the relationship between the dollar index and digital currencies.
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• May 05, 2022 · 3 years ago
  According to a study conducted by BYDFi, there is a strong negative correlation between the dollar index and the market capitalization of digital currencies. When the dollar index increases by 1%, the market capitalization of digital currencies tends to decrease by approximately 0.5%. This suggests that changes in the value of the dollar have a significant impact on the overall market sentiment towards digital currencies.
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