CONCLUSION

Bitcoin was a new commodity. Many people began to demand it with future expectations of spending it. As the price rose the marginal utility individual market participants derived from each additional bitcoin unit began to be outweighed by the marginal utility they would derive from goods or services they could purchase in the present with the bitcoins. Therefore, many individual market participants began to exchange their bitcoins and in aggregate the marginal utility of bitcoins to be held as cash balances fell which resulted in a decline in the price of a bitcoin.