Does Bitcoin's appeal increase as the price rises?

Bitcoin price can rise and fall by thousands of dollars in an hour. For smaller projects this can be done in seconds. But despite the infamous volatility of cryptocurrency, the desirability of digital money is moving more slowly. While there is a rich and diverse crypto corner specializing in price prediction, there is a much smaller group of people who look at Bitcoin from a behavioral economics perspective. Sentiment around Bitcoin especially when the price goes up. When Bitcoin price rises, will demand follow? And more importantly, when the price of Bitcoin drops, does its allure disappear with it? In this week's article, we'll examine whether Bitcoin has become what economists call Veblen or Giffen Goods. Veblen or Giffen good? A Veblen good is typically a luxury good that has the advantage of becoming more attractive as the price of that item increases. Think of a priceless piece of art or a luxury car brand: the higher the price, the higher the demand. First conceived by the American economist Thorstein Veblen in 1899, this phenomenon was intended to highlight how certain products and goods behave very differently from others. A Veblen demand curve. IMAGE: Wikipedia. According to its creator, a Veblen good has an ascending demand curve, meaning that as the price increases, the demand also increases. This goes against what happens to more general goods. Normal products, such as food or everyday items, typically follow the opposite pattern: as price increases, demand falls. However, a Veblen item is a high-quality item that is often coveted, and owning it requires a high position among its peers, encouraging low-income people to copy the so-called "dandy-good" purchase. effect'. Ultimately, academic Richard Elliot wrote in his article on addictive consumption that "wealthy consumers may be attracted by superficial factors such as rarity, celebrity representation, and brand prestige." a Giffen sticker

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