* Bitcoin builds infrastructure.
* People notice bitcoin isn't going away
* Media says Bitcoin will make everyone Gazillionairres
* Bitcoin skyrockets until infrastructure comes under strain.
* Something involved with bitcoin breaks
* Media(not neccisarrily the same media) says Bitcoin is all over, and everybody will lose their bitoin, their home, and their dog.
* Price drops.
* Bitcoin builds infrastructure.
* People notice bitcoin isn't going away
We seem be going into the build infrastructure phase. That's where genuine value actually gets added, and doesn't actually stop at the other times, It's just when the craziness is going on it's hard to see from the noise.
Having said that, I'd be inclined to put regulation and compliance milestones under the heading of infrastructure.
If you mention Bitcoin now, People also don't assume you're a crazy Libertarian buying drugs off the internet (your parent's might still). In a funny sort of way that's infrastructure growth too.
Source? Unless you consider the failure of Mt. Gox an "infrastructure" problem, then this is not the case.
Other Exchanges had problems, I remember the "you can have bitcoin next friday, when we've got some ourselves" episode (bitinstant perhaps?).
Even the most prepared business are going to have trouble when everyone decides to come knocking on your door in in the space of a fortnight. You can prepare for rapid scaling, but you can't hire and train people overnight.
This doesn't affect consumer adoption though, which is what investors/traders would be looking at.
Also, if the number of bitcoin transactions through such methods goes up, BTC/USD is more likely to go down. Any bitcoin sent to a Square merchant will be picked up by Coinbase and sold at the bid price on the bitcoin markets, which will pressure price action down. (Coinbase then takes the USD from that sell and transfers them to Square).
Other factor: the price of BTC is still REALLY high (not that it couldn't 1000x) and assumes there's tremendous (billions of dollars) value in BTC long term. Square processes billions of dollars a year in value, but not on Market and it's not many billions and not much of that will go to BTC.
It's a smart marketing stunt (Square Market has been struggling to compete with more established marketplaces, so this could drive traffic to their service) but in no way points to the evolution of the bitcoin ecosystem. That will have to be measured on the consumer side of the market.
Even if it where tracked people buying things with bitcoin can just as easily drive the prices up as down. As with all transactions you must take into account the value of both sides of the transaction.
Whether that winds up being 1 or 1000 bitcoins is totally irrelevant. There's no intrinsic value
Volatility makes bitcoin a poor store of value: you should not leave assets in bitcoin that you cannot afford to lose, because those assets may vary in actual value (meaning, might vary in what someone else is willing to pay for it) substantially over time: $10,000 of bitcoin today might be $5,000 tomorrow.
Volatility makes bitcoin a poor medium of exchange: if I wish to sell something with bitcoin, I take on large risk that the value of my transaction might change. The t-shirt I sold for $10 today might yield me only $2 tomorrow.
So, it is accurate to say that there is no intrinsic value to a bitcoin--but this statement is meaningless. $10 is also not an intrinsic value--currency is only relevant as a unit of account or a medium of exchange. Things only have value relative to each other. We use currency to assign a numeric value to each object.