Borrowing cost represents the expense incurred when obtaining funds or assets from a lender. In digital asset markets, this typically involves interest rates paid on cryptocurrency loans, often collateralized by other digital assets. The cost is determined by factors such as market demand for the asset, the loan duration, and the perceived risk associated with the borrower or platform. It directly impacts the profitability of leveraged trading and decentralized finance strategies.
Context
News about borrowing costs in crypto often relates to fluctuations in decentralized finance lending protocols. Changes in these costs can signal shifts in market liquidity or investor sentiment. Monitoring borrowing costs is essential for participants engaging in yield farming or seeking capital for digital asset ventures.
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