The fact that there is already a LOT of money invested into this one. People are already skeptical about cryptocurrencies. This one busting will prolly kill the concept for good at least for ones who put in their time/money.
Nonesense. Everything that makes bitcoin useful has nothing to do with the price of bitcoin. Ease of transactions, fixed supply, relative anonymity, the ability to store value out of the reach of governments, ect. It isn't an investment vehicle designed to make people rich.
As for the OP, competition isn't a problem for bitcoin. Because again, what difference does it make if the price is $5 or $5,000 a coin? The only thing that changes is the number of coin's used to make a particular transaction.
But isn't the problem that it is a deflationary currency. I mean, if you know that the value of your coins in USD terms will be worth more tomorrow than today, why would you exchange them for anything?