This is because they realize they will lose value to inflation if they simply put it in a safe. With strong money you are safe from such loss and don't need to risk your money in such a fashion.
The money thus will not make it back into the economy until the person hoarding/saving sees something (s)he wants to spend said hoard on. There's no incentive to invest, and there's no incentive to borrow money to put it to work either since debts rise while prices go down. If this is allowed to run away it turns into hyper deflation.
There can be no hyper deflation. There can be deflation of money supply (because bitcoins will start to diminish at some point due to losses). In the take up period (like now) there will be deflation of prices, but eventually it will stabilize.
Remember, any actor will hold some money for spending in the future, have some safe investment returning near the natural rate of interest (which is based on each individuals time preference), lend low risk (deposit in bank or a lending consortium) for the same natural interest rate, and invest in risky entrepreneural projects (where profit and loss cancel each other out). There will never be a situation where people only hoard and never spend. That would be nonsensical. All kinds of saving of money or investment is for consumption in the future.
Spending and consumption will cancel each other in the long run. Temporary increase in total saving can occur if some kind of global crisis is expected, in that case a temporary decrease in prices will result.
The current deflation scare is partly a denigration of common people and their capacity of understanding that an increase in salary is no good if the prices of goods increase correspondingly, and partly it is a fake argument to support the transfer of wealth to banksters.