2) Store of Value
After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely.
The viability of a commodity as store of value is unrelated to its viability as medium of exchange. A Picasso painting is a poor medium of exchange but a decent store of value. BTC could be a store of value in the long term if it is perceived as rare and desirable.