Novelty and status: Rare tulip varieties became a fashionable luxury and status symbol among the prosperous Dutch merchant class.
Futures-style contracts: Trading in contracts for bulbs not yet harvested allowed speculation to build more easily than cash-only trading would have.
Herd behavior: Rapidly rising prices attracted more speculative buyers hoping to profit from continued gains.
Effects
A cautionary case study: Tulip Mania remains one of the most frequently cited early examples of a speculative asset bubble, still referenced in modern discussions of market manias.
Limited broader economic damage: Unlike later crises, most historians now believe the crash's effect on the wider Dutch economy was relatively contained.