The data shows what happens to a currency like this is very predictable, and the behaviors we're seeing (deflation, currency hoarding, stagnation of real bitcoin output) are great predictors of crashes like this.
You still see them swearing allegiance to Bitcoin and deriding those who sold during the crash, all the while holding on to their, at least temporarily, worthless Bitcoins.
It's not absolutely convincing though... I can't succinctly describe all my objections but I will say this though: the correspondence to tulip mania just doesn't hold for me, as the the tonic that drives up the price of BTC is the same tonic that gives them any value at all (simply because it has two attractors, zero and, as the link points out, something huge.) I am of the belief that tonic will remain modulo biases against, so unless that reaches critical mass the push will still be greatly upward.
So the data looks similar in places and for similar reasons in most of those places, but the foundations work differently in many ways. None of what I've said above applies to the tulip situation, and all of it has to do with how it is valued. Consider the attractor(s) for the price of tulip bulbs. When it's going up it's open-ended, where BTC has a closed end. (How well that closed end approximates infinity is a cause for concern of course.)
It is interesting to consider alternatives though - bitcoin could be the Friendster of crypto-currencies.
What the value is doing over short periods of time (particularly, volatility and liquidity in BTC markets) will affect the transaction fees that will need to be associated with that kind of transaction in order for anyone not to go broke fulfilling them.
If you expect the value of bitcoins to keep going up, why would you only hold them for short periods of time? You're suggesting that people would wait until the last possible moment to change their dollars into bitcoins. But by doing that, they're losing money if the value of bitcoins is going up relative to dollars. In that case, the best strategy is to switch into bitcoins as early as possible, and hold them as long as possible.
I'm arguing that despite likely wide swings in the value of bitcoin, it's value as an anonymous transaction currency will prevent it from going extinct.
People hoard it, driving the price to $10,000 and driving speculators to tears of joy, still people can make quick transactions in fractional bitcoin. It goes bust and the value dives to $10, yet the people using it for transactions could care less.
BTW, it's "could not care less" as in "I could not possibly care less than I actually do". If you could care less that would mean that you do care. Sorry, personal pet peeve.
Oxford recognises "could care less" to mean "couldn't care less".
"I couldn't care less" is pretty new, first seen in mid 20th century. "I could care less" is newer, but has been in use since at least 1969.
This page has some interesting talk about Yiddish stress patterns. When you think about it you can imagine someone saying, sarcastically, with palms up and arms spread, "I could care less", meaning "As if there's anything in the world I could care less about".
If I were European and wanted to buy some stuff from China later in the year, the rational thing to do (given an expected Euro fall) would be to change to Yuan today. If you take this to it's logical end (extreme) then I would be changing all my money, and become a currency trader.
To me, the dual functions of BTC as an asset and a transfer mechanism are almost unconnected, often with opposing interests. I often hear how much BTC would be worth if it were used for X% of trade; it's rubbish, that only applies IF people hold BTC for any significant amount of time, which is at least not a necessary part of the equation.