It was heavily being used for payments in the early days, where silk road is the perfect example of how well Bitcoin can function as cash. On top of that, due to the lack of services where you can exchange your Bitcoins for fiat, people kept their coins and just spent it as a way to cash out. Bitcoins were circulating as how cash is circulating right now, and that's how it technically should be. People used it as cash because they understood the technology aspect of Bitcoin and for that reason got excited and kept using it. Right now people's understanding of Bitcoin isn't there, and they don't even bother to dive into it. It's all profits they care about.