I totally get you, as I had a similar line of thinking when delving into ICP tokenomics. The idea that cycles burning could balance out cycles minting for a deflationary effect seemed the most logical. However, achieving that deflation will require consistent burning of quadrillions of cycles, which is nearly impossible, especially in the short to mid term.
The interesting part is that the architects behind ICP tokenomics haven’t spilled the beans on the design logic. It’s kind of a mystery. I’ve actually shared my take on it in this forum thread, and you might find it interesting to dive into the discussion there: Thoughts on Governance and Cycles.
My unconventional hypothesis is that the sensitivity of ICP’s price is more closely linked to governance participation and the demand for SNS projects rather than cycles burning. The potential catalyst for an ICP bull run lies in the moment mainstream institutions recognize and decide to engage in ICP governance, outweighing the impact of the demand for cycles.