But it has already recovered from quite a few previous crashes.

Those previous crashes lasted a day or less, and happened when bitcoin was dirt cheap. If, as we are guessing, there was a pump and dump planned, the pumper had no problem just soaking up whatever coins were on the market. But the crash after the $1,230 price is a different animal. First of all, the pumper and dumper made his pile. Second, the price is too high for him to artificially bring it back from the dead. Third, that last crash has lasted over two years, and still bitcoin is only half of what it used to be. In other words, those early recoveries prove nothing.



IF it goes to new highs (above $1200) again,

If.



that would further increase the probability that actual utility is derived from it (by some people)

The fact that someone is paying for it means he is getting some actual utility. I presume it is the same utility someone gets who goes to the movies and imagines he is Spiderman for an hour or two. The utility of having a sweet illusion that his money is somehow safe because it has turned into a bitcoin.



Allow me to digress a bit. What is the difference between money and an object of a bubble? Money gets a lot of its value because people think you can pass it on to the next fellow. And a house in the midst of the housing bubble, for example, had a lot of its subjective value, meaning had a very high price, because people assumed they could pass it on to the next fellow. So why do we say the value of the money is solid but the price of the house is ephemeral and bound to fall? Is not the value of both because they can be passed along to the next fellow?



I think the answer is this. Money always has buyers. There is always someone who wants cash, plenty of someones. There will never be a day [barring hyperinflation or other things like that] when everyone will just be tired of having money in their wallets. But the market for houses can get satiated. Everyone who can afford a house will have one, and so prices will go down.



Is bitcoin like money, or like a house? Will there always be plenty of people who feel a need to own a bitcoin? Or can there come a time when the market will be satiated? I think the answer is obvious. Of course there can come such a time, at least in theory. The question is, will it ever come? How can we know?



And the answer to that is, I think, that when people are buying an object only in order to pass on to the next sucker someday, not to use in their homes as food or drink, nor to go shopping with, but just waiting for the right time to make their killing, then sooner or later the market will be satiated. And when a recession comes and people need actual cash to pay their bills and have nothing to spare for such luxuries and gambles as bitcoin, and the Chinese no longer need what they imagine is a safe haven for their money, because they are going to spend that money right now, then the bubble will burst.



...and decrease the probability that it's a purely speculative mania like beanie babies or tulips.

Z, my good buddy, you have already told me recently that bitcoins are being bought purely for speculation right now. That the one other use they have is buying things from overstock.com, but nobody is actually doing that, and probably never will. [Why should they, when it is so cumbersome to use to actually buy things, and cash is so much more convenient?] So we agree it is speculative.



I guess you are saying it is speculative, but not a speculative mania, but rather a justified one. But justified speculation means there is a reason that in the future people will want bitcoins even more than they do now. What is that reason? It can't be to speculate further with, obviously.



There equally has to be a reason for there being more buyers than sellers during the recovery phase after a collapse, especially if that pushes the price beyond the previous "bubble" price.



Who says there will ever be a recovery phase? Like I said, the pre-2014 "recoveries" were just the pumper buying up the handful of bitcoins out there within 24 hours to repump. And there was no recovery from the 2014 crash. Bitcoin still sells at half what it did then.