I prefer to think of value as a function of rarity and utility. I'll skip over rarity but utility can include the possibility of selling something for more than it was purchased at some time in the future.

If someone pays an exorbitant amount for something it has that value to them at the time of purchasing. Whether that value is reflected in the market price or persists over time is something else though. Value is not static. Value is dynamic. You can observe this both personally and in the markets.