While it could be true that long-term holding of Bitcoin is the most likely to produce "ridiculous gains in purchasing power", this will only actually occur *if a significant number of people do NOT hold and do sell some or all of their coins along the way to distribute wealth and gain market penetration.
If, Hypothetically, 90% of people keep 90% of the coins they acquire for the next few years, Im sure the price will skyrocket to huge levels, which will drive even more people to desperately try to get hold of coins so they too have some of this rapidly appreciating asset, driving the value even higher. Actual trade would be low and the "value" would be based mainly on their rarity.
However, as soon as someone decided to *use any significant amount of "purchasing power" to buy their castle, yacht, jet or whatever, the price would dip significantly, which would very likely trigger a lot more people to quickly jump out in the belief that a "top" of the speculative cycle had been reached (just like what happened at ~$1200) and the price would come crashing down (again).
This cycle will repeat over and over again, until either 1. Coins are distributed widely enough (and *in use, not just Held) that the boom/bust cycle dampens out and the oscillations decrease over time (which is what I think is happening). or 2. The Majority get sick of being Millionaires one week and Paupers the next, and give up on Bitcoin and return to a more stable, elastic form of money.
This is one of the reasons why the central bankers claim to require the ability to print money on demand. An "Elastic" money supply allows them to dampen out any crazy speculative value swings, by increasing the supply temporarily, and decreasing it when demand is lower. Unfortunately, such control is also vulnerable to abuse by those who control the printing presses, and has proven time and time again to be of short-term benefit, and long-term detriment to all prior forms of fiat currency.
Many people have questioned whether an Elastic money supply is actually a good thing, despite its short term benefits. If the "Smart Economists " who claim to have models and theories justifying Fiat money are correct, then why do their models keep failing, and we have recessions, depressions, and booms/busts, even *with all of their "Financial/Economic Tools" to manipulate the supply ?
https://www.google.com.au/search?q=elastic+money+supplyBitcoin is an modern internet-enabled experiment with an *inelastic money supply, and the initial wild value swings were easily predicted and expected by anyone who understands the attributes of such a form of money. The hope is, that the oscillations will dampen out over time and it reaches a more stable *long-term value (although it will likely never be as short-term stable as fiat currencies are) which will make it seriously useful to those who are willing to ride out the short term waves.
So, just advising everyone to "HOLD!" no matter what will actually work *against its long term success, even if it means some folk who *might have been "rich" would otherwise not be.
Reference is often made to the "10,000BTC Pizza" of yesteryear.. and "imagine how rich he would be now if he hadnt bought that pizza !".
In fact, if he *hadnt (and the majority of holders also hadnt spent anything), then Bitcoin would quite likely have *NO value at the current time. Someone has to spend *some (and a few have to spend the majority) of their wealth along the way, or it will *not ever be anything except a crazy roller coaster ride for thrillseeker day-traders.
