How does AUM impact the value of digital currencies?

3 answers

• Mar 07, 2022 · 3 years ago
  The AUM of an exchange can have a significant impact on the value of digital currencies. When an exchange has a large AUM, it indicates that there is a high demand for cryptocurrencies, which can drive up their prices. Additionally, a large AUM can also contribute to positive market sentiment, as it shows that investors have confidence in the exchange and the overall cryptocurrency market. On the other hand, a small AUM may indicate a lack of interest or trust in the exchange, which can negatively affect the value of digital currencies.
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• Mar 07, 2022 · 3 years ago
  The impact of AUM on the value of digital currencies can be compared to the effect of market capitalization on traditional stocks. Just like a company with a high market capitalization is often seen as more valuable and trustworthy, an exchange with a large AUM is perceived as more reputable and can attract more investors. This increased demand can drive up the prices of digital currencies traded on the exchange.
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• Mar 07, 2022 · 3 years ago
  According to a study conducted by BYDFi, there is a positive correlation between the size of an exchange's AUM and the value of digital currencies. The study analyzed data from multiple exchanges and found that exchanges with larger AUM tend to have higher cryptocurrency prices. This suggests that investors perceive exchanges with larger AUM as more reliable and are willing to pay a premium for cryptocurrencies traded on these platforms.
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