Bitcoin boom and bust - Inherent instability of Bitcoin
and they eventually generate Bitcoin faster than the market demands.
  


This assumption doesn't apply, unfortunately. The production rate of Bitcoin is self-regulating and does not correspond to the overall mining capacity. This is due to the difficulty resets that happen every 2016 blocks which adapt the production to the network's mining capacity.

So, when miners compete, they do so for a roughly fixed amount of new bitcoins. When one miner grows their hashrate faster than their competitors, they may get to produce a larger share of the total, but they will not be able to significantly increase the overall production.