What does fiat inflow mean?
Fiat inflow is the process by which traditional currencies (fiat), such as US dollars (USD), euros (EUR), rubles (RUB), and other national currencies, enter an exchange or ecosystem.
This term is often used in the context of cryptocurrency exchanges and financial markets when referring to the introduction of traditional money onto a platform to purchase cryptocurrencies or other assets.
What does fiat inflow mean in the context of the cryptocurrency market?
🔵 Account funding: Users transfer fiat currencies to cryptocurrency exchanges to purchase digital assets such as Bitcoin, Ether, and other cryptocurrencies.
🔵 Positive Market Signal: Fiat inflow can indicate growing investor interest in cryptocurrencies, often interpreted as a positive market signal as fiat funds can be used for new investments.
🔵 Increased Liquidity: Fiat inflow increases liquidity on exchanges, which can lead to increased trading volumes and a stabilization of price fluctuations.
In contrast, fiat outflow means users are withdrawing their fiat money from an exchange or selling cryptocurrencies for fiat, which can indicate a decrease in interest in crypto assets.
