How does the law of decreasing marginal utility affect the demand for digital currencies?

1 answers

• May 03, 2022 · 3 years ago
  At BYDFi, we believe that the law of decreasing marginal utility does impact the demand for digital currencies. As individuals acquire more units of a specific cryptocurrency, the marginal utility diminishes, leading to a decrease in demand. This phenomenon is driven by the fact that the initial excitement and potential gains associated with acquiring a new cryptocurrency gradually fade away as more units are acquired. Moreover, the availability of alternative investment options and the emergence of new cryptocurrencies can also contribute to the decrease in demand for specific digital currencies. It's important for investors to consider these factors when evaluating the demand and potential future value of digital currencies.
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