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๐งต#RepoMarket Explainer and the impact on the #crypto market
In this thread, I'll break down the repo market in simple terms so that anyone can understand it. Plus, I'll explain its importance for #crypto ๐
* Don't forget to like and commend if you learned something
In this thread, I'll break down the repo market in simple terms so that anyone can understand it. Plus, I'll explain its importance for #crypto ๐
* Don't forget to like and commend if you learned something
Imagine you need a short-term loan, and you have valuable items to use as collateral. You give the items to a friend, and they lend you the money. After a short period, you return the money plus some interest and get your items back. ๐
The repo market works similarly. Financial institutions like banks and hedge funds exchange assets, usually government bonds for cash, with an agreement to repurchase the assets at a later date (hence the name "repurchase agreement" or "repo"). โณ
