There is only transactional and speculative demand. For transactional demand the price is irrelevant. So that simply leaves speculative demand. And since Bitcoin is a Giffen good that is produced only to be hoarded and not consumed therefore it has a paradoxical effect: As the bitcoin price rises it decreases float supply and increases demand.
He's forgetting about mining.
No he isn't. He's - correctly - ignoring it. It just confuses the issue. Mining is esoterica, these days - not for anyone just getting started.
Just because he's ignoring it, doesn't mean that it is not there. I'm talking about this part:
"As the bitcoin price rises it decreases float supply and increases demand."
This implies that the price can go up forever and ever. But that is not true. Bitcoin mining uses power that is proportional to the price (with a lag). This power must be paid in currencies other than BTC, but mining awards are in BTC. This will cause downward pressure on the price. This resolves his "paradox".
He says that bitcoin is a Giffen good. But he does not mention that total cost of running the network also rises proportional to the price. Perhaps he is now aware of this fact, because it comes with a lag, but it's there. Bitcoin price can't simply go up forever.
