Economic Equilibrium

Definition ∞ Economic equilibrium represents a state in an economic system where opposing forces balance, resulting in no tendency for change. In markets, this occurs when supply equals demand, and prices stabilize. For digital assets, it signifies a balance between buying and selling pressures, leading to a relatively stable asset value. This concept is fundamental to understanding market behavior.
Context ∞ The concept of economic equilibrium is frequently referenced in analyses of digital asset markets, particularly concerning price stability and market efficiency. News often discusses whether a particular cryptocurrency’s price has found a temporary equilibrium after periods of high volatility. Achieving a stable equilibrium is a goal for many stablecoins and decentralized finance protocols. Market participants monitor indicators that suggest a balance between forces driving asset values.