Speculation is when you store value instead deriving it from utility

Fred Wilson:

...that point is that you can’t keep spending something that goes up as much as Bitcoin has.

So I don’t spend Bitcoin anymore.

I hold it.

It’s a store of value now.

Ironically, once you realise something is valuable because it has utility, you turn it into a store of value.

That’s when speculation begins. And prices begin being driven up, and no longer because of its increasing utility.

When common wisdom is “sure, it’s valuable today but let me not use it because it’ll be even more valuable tomorrow”, and now that increase (explosion?) in value is because of little other than everyone thinking the same thing.

Bombay real estate is exhibit A.