the WaPo article links to a forbes blog which argues against the deflationary effect of bitcoin by saying: "Removing the gimmicky God hypothetical doesn’t chan

the WaPo article links to a forbes blog which argues against the deflationary effect of bitcoin by saying: "Removing the gimmicky God hypothetical doesn’t change the basic insight: if market participants become convinced that “the price of a bitcoin is on a steady upward trajectory,” they’re not going to hoard their Bitcoins for weeks or months waiting for the price to rise. They’ll bid the price up right away." This is incomplete thinking. It is true that if people internalized the deflationary aspect of bitcoin they would automatically bid up the price but there are two aspects of this the author ignores. One, the deflationary effect is small and continuous. Not at all like his "God analogy" of a one-shot increase. And for the most part that is exactly what we have been observing with bitcoin - with the occasional exacerbation of this through old fashioned human irrational exuberance thrown in for good measure (April 2013 and now). Second, at the same time as the deflationary effect which serves to increase prices, there is another force pushing prices down (slightly). That is the need to use bitcoin for purchases either illegal or legal. This obviously requires both the buying (if one does not have bitcoins) and the selling (after one has acquired them whatever means, either mining or purchasing in an exchange transaction). The conclusion is that there are several forces or layers of push/pull at work at the same time on bitcoin prices. This does not magically remove or nullify the fact that a deflationary force exists! Nor does it mean that the deflationary force is not the major one.