You may enjoy this essay, which calls this mechanism "liqudity flywheels": https://lt3000.blogspot.com/2020/07/market-inefficiency-liquidity-flywheels.html http

You may enjoy this essay, which calls this mechanism "liqudity flywheels": https://lt3000.blogspot.com/2020/07/market-inefficiency-liquidity-flywheels.html https://lt3000.blogspot.com/2020/07/market-inefficiency-liqu... A liquidity flywheel is a situation where inflows into an asset class lead to buying pressure that pushes up prices, leading to favourable apparent return and volatility characteristics in the said asset class. This favourable outcome then attracts yet more inflows, leading to yet more buying, etc. Conversely, poorly performing asset classes with significant downside volatility can lead to investor redemptions, leading to forced selling that contributes to yet further price declines, yielding even worse returns and even greater redemptions, and so on. This process can go on for years, and sometimes even for decades, and is a fundamental contributor - perhaps the most important contributor - to both major asset-class bubbles, as well as asset price busts and secular lows that lead to fire sales prices (which are 'anti-bubbles' driven by the same drivers of bubbles in reverse)