[sks]

I agree that Bitcoins were designed as an instrument to facilitate transfer of value and not as store of wealth. But the example of a transaction you just gave in your post is not how people spend currency. No one converts a currency (100$) to another currency (0.478 Bitcoins) for immediate spending in the real world. People generally minimize number of currency conversions (to save transaction costs) and store the currency (wallets or banks) for some time before spending it, and storing volatile currencies carries huge risk.

The current price explosion is not good for bitcoin if you look at it as a currency. People who believe this is a bubble will just cash out of bitcoins anticipating a fall and the (apparently) greater number of people thinking the value will rise will just hold on to the coins. The only way this price explosion can be helpful is in providing media exposure to bitcoins and cryto-currencies. Only after we have sustained period of stable prices we can hope of bitcoins becoming a major facilitator of transaction.

[YokoZar]

Storing volatile currencies creates risk, no doubt, but it also creates demand independent of speculation.

Interestingly, this implies that more convenient bitcoin exchanges could greatly lower the demand for bitcoin.