What Is the Risk of a Token Having Utility Only as a Medium of Exchange?

A token with utility only as a medium of exchange (i.e. used solely for payment) faces the risk of high velocity, meaning users quickly acquire and then sell the token. This high velocity prevents the token from being held long-term, which limits its price appreciation and intrinsic value.

Investors are less incentivized to hold it, as it acts more like a transaction medium than a store of value.