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Not that I disagree with your premise, but real estate and, to a lesser extent, art and gold, have intrinsic value in that they can be used for a purpose outside of a store of value. For real estate, utility is a much larger share of the market value than the others.

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I agree but that doesn't negate the point. Any economic asset with limited supply has two sources of value. The first is intrinsic as you've correctly pointed out which through intrinsic demand by people looking to use the asset for its actual properties will gain intrinsic value.

The second is monetary. Asset values inflate beyond intrinsic values as a result of monetary demand for them by users that acquire them not for their intrinsic properties but for their potential capacity to be redeemed for value in the future. This monetary demand lives on top of intrinsic demand and drives overal value of the asset up the supply / demand curve.

My comments applied specifically to the monetary user base of any asset. This base's choice of their monetary base is entirely elective, socially constructed and reinforced. And their particular choice will gain favor if they can convince people to get on same the band wagon. Under this specific use case, they will tend to exhibit the perfectly understandable behaviors I've described.

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