MAY 5
The Demand Curve
When the Price Stays Put but People Change
The Signal
Demand can grow at the same price when people find a new reason or a new way to buy.
The Reading
I stumbled across Bitcoin. I didn’t set out to write The Professional Hodler or these daily readings. I just had a few questions. One answer led to another, and the more I learned, the more I wanted to own some. I didn’t need the price to come down for that to happen. I was beginning to see why it was worth buying in the first place.
That’s where the demand curve comes in. It shows how much people are willing to buy at different prices. If I’m willing to buy more because Bitcoin gets cheaper, I’ve moved along the curve. But if more people go through what I did and decide they want some at the price it already trades for, the whole curve shifts. At the same price, there are now more people who want to buy.
Access can change demand too. In January 2024, the US securities regulator approved the listing and trading of spot Bitcoin products. That opened a route through brokerage accounts. Imagine a fund manager whose rules allow listed products but rule out holding bitcoin directly. At the very same bitcoin price, that manager now has a decision to make that was previously out of reach. The opportunity has changed for that buyer. Households and institutions can both respond to easier access, even when their reasons for buying differ. Over years, changes like these can matter far more than the excitement of a single trading day. They can change who is willing and able to buy, and how much.
First Principles
A change in price can change how much people buy along the same demand curve.
Better understanding and easier access can shift demand at the same price.
People need both the willingness and the means to buy.
Today’s Challenge
Think of something you once walked past without a second look. Imagine learning something about it that suddenly made it useful to you.
Picture going back and finding the same price on the tag. Would you buy it now? If so, what changed in your mind?
Now ask yourself what you would need to learn about Bitcoin before the price you see today meant something different to you.
Tomorrow’s Signal
Monetisation