"The argument that increasing value means people would prefer to hold Bitcoins rather than spend them is specious. While it will make people want to have Bitcoins more, it will also make people want to convince others to give them Bitcoins more so they can have them."
It is a coy answer to the question. Currency is a good, like anything else. An economic agent (human) trades currency for some other good precisely when that currency becomes less valuable to that individual than the good.