What role does the law of diminishing utility play in the pricing of cryptocurrencies?

1 answers

• Dec 25, 2021 · 3 years ago
  The law of diminishing utility plays a significant role in the pricing of cryptocurrencies. As the number of cryptocurrencies in the market increases, the law of diminishing utility suggests that the marginal utility of each additional cryptocurrency decreases. This means that the perceived value and demand for each new cryptocurrency may be lower than the previous ones. As a result, the pricing of cryptocurrencies can be influenced by this diminishing utility effect. It's important for investors to consider this concept when evaluating the potential value and future prospects of different cryptocurrencies.
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