Very nice points. I really hope the fraction reserve part does not materialize. Point #3 I think is very plausible. Once the speculators see that the volatility has subsided, many of them will start buying other cryptocoins and the ones that are not speculators can either convert to fiat once they see no more upside or start
spending their btc.
It is important to note that adoption itself doesn't affect the price. It is the effect of adoption on supply and demand that affects the price. It seems obvious that increased adoption will increase demand, which will cause the price to rise. However, increased adoption could also increase the supply of bitcoins available to spend and reduce the demand, and that would put downward pressure on the price.
Here are ways in which increased adoption could increase the supply or reduce the demand:
1. Velocity -- increased adoption will make bitcoin transactions more liquid. Fees will drop and it will become much easier to obtain bitcoins and exchange them, and there will be less need to hold them. So, where it now takes 11 million BTC to power the economy, in the future it could take much less. Demand will drop as a result.
2. Fractional reserve banking -- At some point when Bitcoin has become more mainstream, a fractional reserve banking system may develop and the supply of bitcoins will double or triple, or more.
3. Reduced savings -- As the exchange rate begins to stabilize, the return on holding bitcoins will drop and people will be less inclined to hoard them. Spending hoarded bitcoins will increase the supply.
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