as far as I'm aware, the technology S-curve has historically been marked by an increase in supply that outstrips the increase in demand, hence the reduction in price.
I don't think that is true. The adoption S-curve has nothing to do with the supply of the innovation in question and everything to do with the rate at which the public adopts the innovation. Cars, radio, TV, electricity, the internet, cell phones, GPS, social networks, etc are all technologies that have followed or are currently following an S-curve for adoption. The S-curve has less to do with supply and demand and more simply to do with the adoption of the innovation by the public at large. The price of commodities has more to do with supply and demand and production economies of scale and less to do with the S-curve of its public adoption.
What cryptocurrencies are doing is far closer in terms of supply/demand relationships to historical bubbles, which would indicate that we're better off looking at tulip bulbs and the Irish property market (where ever-increasing demand crashed against limited supply growth and triggered booms in pricing) than the iPod and the printing press (where supply continuously ramped up as demand kept increasing) for an idea of what the crypto market is likely to do.
What criteria are you using for your analysis? You see, this is the main problem I have with those who are making claims about bubbles. Howard Marks, Peter Schiff, Mark Cuban, Jamie Dimon, Robert Shiller, ...these are all people who called Bitcoin a bubble, fad, a pyramid scheme and yet not a single one of them have given a decent analysis as to why they think so. Most of them in their critique have shown (or blantantly said) that they clearly don't understand the technology itself. Ultimately, their analysis has been based simply on the price of Bitcoin alone and nothing more. Howard Marks called it a pyramid scheme even though that's impossible for Bitcoin to be one and even acknowleged that he doesn't understand the technology. Mark Cuban once called it a bubble and yet now he's investing in crypto and changing his tune on Bitcoin. I've yet to see these experts who claim that Bitcoin is a bubble reveal any detailed or reasoned analysis as to why they think Bitcoin is a bubble.
Let look at it this way:
Bitcoin is currently has a market cap of about $90-100 billion. A year ago it was about $10b. That's about $90 billion dollars that have flooded into Bitcoin over the last year. Let's look short term. Where do we think this could go next year? I firmly believe over the next year we'll see Bitcoin go up at least the same amount and hit a market cap of about $200 billion and give it a price above $10,000. Why? Here are a few markers that I believe lead this to be likely:
1) The continued stable operation of the Bitcoin network.
2) Bitcoin options/futures trading
3) The eventual approval of a Bitcoin ETF
4) Continued government approval and regulation (see Japan, Australia, Mexico, Russia, Ukraine, etc)
5) Increased hedge fund crypto investment
6) Massive sign-up rates for online wallets in recent months
You see all these things are creating and generating sentiment and a tailwind for Bitcoin that will allow its continued adoption among users. This is all fueled, as I said, by the fact that the technology that underpins it will continue to operate smoothly.
Now I fully understand that theoretically Bitcoin can go to $0. But, what are some situations that would make that possible?
Perhaps governments all over could crack down on it. But, that would require a drastic change of heart coming from many democratic countries all over the world. China just recently cracked down on exchanges and ICOs and yet Bitcoin still continued on upward. So a crackdown on a few countries (even one as large as China) is not enough to impact Bitcoin. For governments to have a hinderance on Bitcoin's adoption, you'd need a complete worldwide crackdown on some of the world's largest economies, many of which are democratic (and thus less likely to enact such a crackdown).
There could come along another crypto-currency which does exactly what Bitcoin does, only better. Maybe, but Bitcoin has such a drastic lead on other crypto-currencies, that such a huge change in circumstances is highly unlikely to occur over the next year. Also, features that other crypto-currencies have that would give reason for the market to move to something different could be implemented into Bitcoin itself (see SegWit activation).
Then, like I suggested, another possible outcome is that something happens to the Bitcoin network that causes a catastrophic failures which in turn causes the market to lose its trust in Bitcoin. This is certainly possible, but Bitcoin is software and with so much money in the economy, it is more likely that such an economy would look to resolve a failure and fix what's broken instead of abandon it. However, you never know how the market would react to such a failure, so its always possible that a technology failure could cause a market failure. This, however, I find highly unlikely.
Do you have any other thoughts on what might cause a drastic market decline over the next year? Given the markers for positive gain over the next year and the unlikelihood of some of the leading possibilities that could lead to a market decline, it is much more likely that Bitcoin will continue to see heavy growth in 2018. Not just a mediocre growth. I'm talking about a doubling in price which would again make Bitcoin a better investment than just about any other traditional option out there.
This isn't a particularly controversial point: the guy who literally wrote the book on economic bubbles (and won a Nobel for it) has specifically argued that cryptocurrencies are in a bubble.
As I said for you, the same goes for any other person who feels they're an expert. If someone is going to claim bubble, then it behooves them to explain their rationale for making such a claim that goes beyond just a simple price analysis.
You've even acknowledged that the motivations of investors in the market is principally speculative.
I've already said that doesn't matter. The market price for gold has never dropped to the point where it only met the demand for its industry usage. The price for gold above and beyond that is strictly based on speculation as well and yet through all sorts of economic conditions gold has continued to be valued based on speculation alone. What drives this speculative market? The fact the investors place value on its scarcity. Bitcoin is digital scarcity that has been developed based on decades of cryptographic research. People put value on this just like they put value on the scarcity of gold. It is my belief that this will always continue to hold value. This is obviously hard to imagine because this is the first time that something has ever been digital and scarce at the same time. But, this is a big innovation and I see things going in Bitcoin's favor well into 2018.