I think it's a myth that Bitcoin's value mostly stems from transaction value or merchant adoption. The real driving force is long-term investment. Or rather, the value does stem from transaction value and merchant adoption, but not present transaction value or merchant adoption but future transaction value and merchant adoption. One of the things that investors do is drive up the price of things that will serve a valuable function in the future, since most people won't buy them now since they're not valuable for that purpose now.
You beat me to it
an investment produces something, it has utility. investing in a worker and a taco truck, produces a return. buying something and hiding it produces nothing.
the present value should already contain all discounted future value, which is anticipated by market participants. although one could make an argument that market participants are growing temporarily driving up the price.
so then we may have what is called a liquidity trap in the bitcoin world. which would result in deflation (higher btc price)that we are now seeing but it is not a long term innovation value driven bubble by a change in the rate of adoption and rate of tx growth.
IF that is the case, then as soon as the speculators run out of powder and whatever other reasons others may have for hoarding the crash will come , unless tx rates increase dramatically. it could happen, i just don't see it right now.
this is not to say that the price cannot go up, it may for some time, until people realize that there is no additional value from just buying the stuff and not doing anything with it.
