Topic: Is Bitcoin A Giffen Good? (Read 266 times)
Thats a good question ,it has a variable answers.in my opinion is yes.because when btc price is up then demand is go up ,so it has a consecutive bond between btc price and demand
This is the nature of a speculative commodity. The higher the price {and volatility} the higher the interest from investors. If
they see a constant return for a specific commodity, then they will re-invest. When some commodities just increase in value,
speculators will call it a "Bubble" and they will be hesitant to invest. Bitcoin fluctuates a lot and they love that.
they see a constant return for a specific commodity, then they will re-invest. When some commodities just increase in value,
speculators will call it a "Bubble" and they will be hesitant to invest. Bitcoin fluctuates a lot and they love that.
The writer is talking about different types of goods. It's common sense right from the beginning that BTC wouldn't behave this way, because it has scarcity - therefore a higher price means that there is higher demand for it at that particular time.
Hi Iranus, thank you. This is exactly what I would like to know from the operator. @alyssa: So do you think you can solve the reverse causality problem by assuming that the prices are adjusting slowly after a shock in demand appeared? And what would be fascinating when we know that the amount of bids (in$?) increases? What does this imply? Again higher prices? But then why should the demand be higher when the prices are rising? We saw many times (verifying the theory of complete expectation markets), that high oder bids (e.g. whales) do not necessary lead to higher prices. How do you want to control for this indentification problem? Thank you for your response.
This is the opposite of how most goods behave - as prices rise, demand falls off.
The writer is talking about different types of goods. It's common sense right from the beginning that BTC wouldn't behave this way, because it has scarcity - therefore a higher price means that there is higher demand for it at that particular time. In the case of Bitcoin, it seems clear to me that we are in a stage where rising prices fuels further demand - like a Giffen good.
What it's like is a speculative bubble. It's at a point where no price increase will make people think it's too high, and most people buying in are self-aware enough to know that they are looking for a "greater fool" to buy at a higher price than them.The article is trying to make BTC appear invincible, as if these prices increases are an inherent feature of BTC that will continue and perhaps even multiply in time, but it seems extremely unlikely that this will come true.
Very interesting question. What exactly do you want to show? What is your dependent variable? Remember that for every buyer there is a seller such that both think they have made a good deal.
https://www.forbes.com/sites/petertchir/2017/10/22/is-bitcoin-a-giffen-good/#5aff32b5fc4e
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As Bitcoin streaks towards $6,000 I continue to think about what will drive it higher. In the near term, it struck me that Bitcoin is behaving as a Giffen good.
Giffen goods are defined as 'those goods whose demand rises as their price rises'. This is the opposite of how most goods behave - as prices rise, demand falls off. In the case of Bitcoin, it seems clear to me that we are in a stage where rising prices fuels further demand - like a Giffen good.
Giffen goods are defined as 'those goods whose demand rises as their price rises'. This is the opposite of how most goods behave - as prices rise, demand falls off. In the case of Bitcoin, it seems clear to me that we are in a stage where rising prices fuels further demand - like a Giffen good.
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