As you can see, I'm learning ABC in crypto currencies and studying this for last 3 4 months, even after reading all these web pages, forums etc, still Im having one basic question needed to clear out. I would really thankful if someone can help me with this.
We all know, BTC is making a huge growth for past few years and as a result, people start to invest / trade in BTC. With my little knowledge I assume that no one is going to use BTC / couple of Sathoshi to purchase things as they are really good to keep (HODL) as the value is going high and high. But if you think of any of fiat currency, the value of money is depending on the use of it. For example, if everybody is keeping their money (fiat) in their pocket without spending, the market will not have enough money for trading and value of the currency will not goes up. Why the same principle not applicable for BTC ?
Ive seen lot of answers like, market will not have morethan 21M BTC and that amount will be saturated by 2140, hence there will not be any inflation etc. But what I do not understand is, if a currency is not using (in trading purpose you buy something with that money), what is the logic behind the reason of value of the money goes up ?
Maybe it is because Bitcoin's market demand is also growing day by day. Bitcoin's market value is just dependent and is proportional with the demand from the market such that as its demand increases same thing happens on its market price. So the reason behind the continuous increase on its price in the market is its growing community that produces high market demand.