Eventually, demand and supply will balance. The balance is just a little bit different than with fiat currency, but its unsound reasoning to think that Bitcoin would continue to appreciate to infinity while an economy would shrink because nobody spends. That will simply not happen.

Of course, what will happen is that people currently in charge of fiat money cannot influence a Bitcoin economy that easy. Markets will set the demand and supply, not the beneficiaries of the current system. I'd like to try that new system for a change.