They are only worth $180 now... after dropping from $265! Talk about missed opportunities...
The combination of rapid fluctuation and (from my understanding) a transaction process that takes around ten minutes or so scared me off. Well, that and I still think it's a pretty flawed concept. Well, as a currency. As a commodity (which is all 99% of people buying bitcoins use it as) it works, sort of. But the market is so limited that a few buyers/sellers could manipulate prices pretty easily, which is what we basically saw here.
It's pretty weird and there's no real need for it (it's claim of being inflation proof is incorrect by definition). I can't see it lasting long term, but I've certainly been wrong before. The thing is that the warnings about it having similar characteristics to some ponzi schemes are kind of valid (although I don't for a second believe it was set up with malicious intent). It's interesting, but as of right now it's just a commodity market for a digital trinket. Well, unless you buy drugs online or really hate the idea of governments controlling the money supply (note that there are very legitimate reasons why governments control money supplies).
Edit: It's interesting to note two things about the recent price volatility:
1.) a big theory is that the sudden surge in value was (at least partially) due to the financial crisis in Cyprus. With assets being siezed/frozen and government sanctions on wiring money out of country, Bitcoin was used as a loophole. Again, it's a very small market, there's a finite amount of Bitcoins, demand drove up the price and speculators jumped on board.
2.) The crash is partially blamed on an organized DDoS attack. First of all, supporters of the concept say this as a way to negate the criticisms of volatility, but they're inadvertently pointing out a huge flaw. Secondly, most seem to think that the "DDoS attack" was actually just legitimate server overload as some big players cashed out at their ideal price point. They cash out massive amounts, the price starts to drop, speculators start cashing out, market gets more flooded and the price drops further. There's a lag present in all transactions (why it's almost useless as a point of exchange currency), but I believe you can still set sell markers so if it hits a certain price you can dump your holdings. These probably weren't affected by the increased lag from all the activity and more holdings were sold off as the price plummeted. Supporters again state that buy transactions couldn't go through (again, this isn't really a good defense in any case) which would have stabilized the price. In reality, a lot of people don't set sell points (at least with real currencies/commodities/stocks) because it can be problematic in certain situations so chances are that a lot of sellers couldn't get through either.
