Well, obviously there are supposed reasoned justifications for the rise in prices. That's true of probably all bubbles. Humans are less rational creatures, than rationalizing creatures. We like stories that convince ourselves we are behaving rationally.
Robert Schiller, the Yale economist and bubble-proponent, suggests diagnosing bubbles based on a checklist-based approach similiar to the way depression or other medical issues are diagnosed, with the following indicators:
- Sharp increases in the price of an asset like real estate or dot-com shares
- Great public excitement about said increases
- An accompanying media frenzy
- Stories of people earning a lot of money, causing envy among people who aren’t
- Growing interest in the asset class among the general public
- “New era” theories to justify unprecedented price increases
- A decline in lending standards
Bitcoin fits the above extremely well. I should note that Eugene Fama shared the Nobel prize with Schiller, but does not believe in the idea of bubbles or Schiller's claimed ability to predict them. After all, one might say that Google's stock fits the above criteria just as well, but that's clearly not a bubble. (I think I side with Schiller on this one though, although Fama raises good points.)
As I said in my first post, I agree that Bitcoin may eventually succeed as a currency and gain a high value. But it will be a slow process backed by fundamentals. The exponential growth taking place right now is pure bubble speculation. Very few really care about this future as an "important currency." Instead, you have people like me. I invested some money. It's now worth nearly 10x. I want it to keep going up, and I am currently letting it ride. I tell myself stories that it will replace gold; I read blog posts arguing that if it does it will be worth $10,000+ a coin. But at some point, the tide will begin to turn. Negative stories will increase. There will be price drops. And people like me, who pretend to themselves that they have a reasoned investment thesis, will say fuck it, and cash out in hordes. And from the ashes, we will then see what it can do as a currency. But the speculators are here, rapidly increasing, and will eventually, rapidly flee. (Although I hope I'm wrong, because I'm probably going to let my BTC's ride one way or the other...it's just too much fun being on this roller coaster.)
Put simply, I think the question is whether the fundamentals have a serious chance at overtaking the speculators before a big bust occurs. The speculators are increasing exponentially. And for all the talk of merchants beginning to use Bitcoin, or a random pizza or bar accepting bitcoins, the fundamentals don't really seem to be there or growing fast enough. I don't know anybody that seriously uses it in that manner, except for the few ardent Bitcoin evangelists. (Although if anyone has any interesting data, please link me!). Black markets and gambling sites seems to be the only real sectors seriously using it as a currency.
Disclaimer: I could be wrong, and change my opinion on BTC way too often to be trusted. :)