I will keep using Bitcoin if it = 1 cent or 100 bucks, It doesn't matter to me.
Regarding using bitcoin as a transactional currecncy; the simple fact is, in order for it to function in a widespread way for a significant fraction of the population, it has to have a much larger valuation than it presently does. The monetary base is on the order of trillions of US dollars. There's simply no way for a fraction of the transactions (business and personal) that occur in the world to take place unless bitcoin has a market cap on the same order of magnitude. So even if there was no one speculating in a get-rich-quick-fashion, the price would still first have to follow a trajectory to much higher $/BTC. It's conceivable BTC is doing that that now substantially on the back of people who want to do money transfers from and to places with capital controls or financial repression. Or it could be that some small fraction of the world is choosing to diversify a small fraction of their savings into this new asset class, not in a speculative manner, but merely for risk management. Are you so sure that's not what's happening, more so than speculation?
Now as for why people don't choose to spend their bitcoins: if one has dollars, and one has bitcoins, and can purchase a good with either one, Gresham's law (or something much like it) will always push people to spend the one that can be debased or seized (a la Cyprus) by the central bankers or sovereigns. Seems natural and expected to me that people don't choose to spend their bitcoins if they don't have to, and thus there's not much consumption transacted in it. I suspect bitcoin is resistant to circulation for the same reason 60% silver US coins don't circulate at face value.
I know some people are buying and holding bitcoins not in a speculative manner, but merely as a means of saving in a currency that can't be inflated away (or inflated away beyond the increase in coins that's already built into the system). I was taught that saving for the future was virtuous. "Hoarding", near as near as I can tell, is merely a pejorative way of saying "saving". If dollars or whatever your favored vehicle for saving, in your judgement, is a good, no one is calling you "Idiot" for doing so. OK some people might. Not me at least. Please allow others to have a different opinion on the matter of whether saving in bitcoin is idiocy.
You people expecting an infinite price increase so they can sell out...
Overlooking the impossibility of selling at a non-finite price, I think if the price ever got to anything absurdly high, it would probably be because the fiat currencies had failed and were hyperinflating. Such that the price is not due so much to appreciation in real terms, but merely loss of value of fiat currency for which btc can be traded. The last thing someone does at that point is turn their savings into a hyperinflating currency. So I don't think that would be "selling out of bitcoin" as it would be "buying into dollars". You can read a lot about what happens in a hyperinflation, and the first thing people in that circumstance do is trade their paychecks for something they think or hope will retain value. In post-Soviet Russia during its hyperinflation people traded their earnings for dollars on the black market. No I'm not saying we are hyperinflating now. Obviously not. At least yet. I was describing a possible scenario that would cause a ludicrous valuation.
I've seen posts here (and other places) going on about how they're going to take out huge, huge loans to buy Bitcoin.
You and I can agree that is pathological. And putting all or most of one's savings in BTC seems foolish to me, too. There are risks. An asset class with a rising price does attract speculators. We won't stop them doing it. In the dot com bubble in the 90's people bought tech stocks on margin, and were wiped out in the crash. Same thing with real estate in the real estate bubble. I don't see how we can expect human behavior to be different in this case. Those people are putting the noose around their own neck. Yes, if what's happening now is mere chasing of price momentum by get-rich-quick speculators we could have a spectacular crash. And you can crow over their folly when it happens. I for one will not. But I think it's an open question whether bitcoin is indeed merely a bubble at this point, or is it rather just beginning to approach the valuation that it's merits deserve. But whichever it is, I don't see a crash being the end of bitcoin any more than the blow-off and crash in 2011 was.
