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Macroeconomics to Determine the Directions of Cryptocurrencies

Jan 19 · 2 min read

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An underrated aspect of economics helps to understand what happens on a larger scale.

Macroeconomics is used to analyze economic developments on the aggregate level. Because developments in cryptocurrencies generally affect the aggregate prices of all cryptocurrencies. Here are the details on using macroeconomics to determine the directions of cryptocurrencies.

1-Money Supply

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The main reason why cryptocurrencies had great returns can be explained in one reason: the massive surge in money supplies. As the money supply surged, it affected all the asset prices within. And when considering $2 Trillion given to the people, it’ll further help to raise cryptocurrencies. Even more, it gives you massive hints on the direction where the global economy goes.

2-Money markets

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Money markets are being taught in the third semester of macroeconomics. And money markets help to determine where cryptocurrencies go. Or it can give you a hint about where does the global economy go. Another aspect of money markets is that it helps where does the printed money go and how you can take positions accordingly.

3-Financial markets

Money on financial markets can help you determine where the money goes after recent developments. But to understand where the money goes, knowledge between various assets is required. After understanding different assets, it can be easier to understand where the money goes. Finally, it can help you make more accurate decisions on what to invest in.

4-Interpreting aggregates

Aggregates on various economic indicators show where the economy goes on a local, regional, and global scale. Despite these indicators can be generalized onto every local scale, the sum of these indicators tell what happens on a local scale. When all the local indicators are summed up in every major country, it becomes easier to see where does the world economically goes.

Have you ever used macroeconomics? Does macroeconomics need to invest in cryptocurrencies? Share your thoughts in the comments section below.

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