3 ms·
> You probably don't realize it, most don't, but your statement is contradictory. It's not. > If something is crashing, it means no one can or will buy it. [.
by chmod775 4y ago
> You probably don't realize it, most don't, but your statement is contradictory.
It's not.
> If something is crashing, it means no one can or will buy it. [..] If people can buy something or want to buy it, it will no crash.
You're only looking at demand as if that's everything that determines price. There's also the supply side to consider, as well as the fact that markets aren't a formless thing with no fixed location existing in a vacuum.
Price crashes can also happen because of competition destroying high margins or production simply becoming way cheaper. Price crashes don't have to be related to demand: it can simply be a matter of companies undercutting each other.
A third way for price crashes to happen is investors buying up a commodity, increasing the price. This will likely cause production to ramp up to compensate, slowly driving the price back down. Once investors see the price beginning to drop, they may sell in a panic. You're left with a market that is flooded by investors trying divest themselves amidst an overproduction, causing a price crash. The consumer never went away or was unwilling to buy though! Averaged over the entire timespan, demand never changed.