1. Because people didn't want to spend their Bitcoin after they bought it, they prefer it to store a value which is hoping that the amount vs to dollar will increase and sell when they saw a profit.
As you have said people are using it for storing values but wasn't it suppose to help people to use it as an alternative to fiat? If people buy it only to hold it as they did with gold and other precious commodities then we can not consider it as a payments system. It become an ultimate way of storing values which redirected its sole purpose of creation.