[clin_]

Your logic is bewildering. In your scenario, you're still essentially transacting in USD and using BTC as an investment or a store of value. You're not actually spending BTC, since you expect the value to continue rising, and you buy back the BTC. Another way of looking at it is that there's no exchange of goods in BTC, since the BTC you sell doesn't transfer to a merchant, but to another investor.

Either way, this implies BTC doesn't have intrinsic worth. The OP's argument stands: deflationary forces make it even harder to create a market in bitcoin since no one wants to trade an asset that they think will appreciate in value.