Why does the interest rate change as the market rises or falls?

[deucher]

I often noticed, especially now, that the interest rates change even on Steblcoins, because I have invested a significant part of my staking in them, and the interest rate changes depending on how the cryptocurrency moves. Why is this happening?

 

[magnus2022]

Every market is rule by the law of supply and demand. Therefore once the two factors changes, the exchange or medium of transaction have to balance the moves to avoid high discrepancy which will pose a threat to their gains. Any negligence on their path may result in loss of billions of dollars. Smart traders use to exploit this discrepancy to make gains.

 

[Starmix]

That is normal because prices are fluctuating, there is no permanence. Tha is one risk factor we have to take into consideration once invest in crypto and other coins.