This is the fundamental characteristic of bitcoin that puzzles me. Most currencies are inflationary, which in low doses is a good thing: it disincentivizes keeping the money under the mattress, maintaining a healthy flow of currency. Bitcoin is by design deflationary: it's value increases over time.

Deflation is destructive to the economy, so if bitcoin is deflationary by design, it can't ever be a primary currency, and thus it's expansion in usage is constrained from the get go.

Now, if you assume the market is smart, then there must be some other motive, other than usage, for appreciation. I suspect an artificial bubble.