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 ?
More people uses it day by day too. You do know that every piece of Bitcoin is so expensive and if you buy tons of it it means youre adding up the factor of the Bitcoin's price the cycle keeps going on and on growth of rate of Bitcoin keeps the users to put more Bitcoin in their wallet and thats the cycle that keeps Bitcoin valuable. Except some incredible issues.