Evidently, many hoarders/speculators decided to cash out at once -- much like the audience in a movie theater would try to go through the exit door at the same time if someone were to yell "fire!"
The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate.
In the long run, however, if Bitcoin continues to work as intended, the more people around the world who adopt it as a store of value and/or medium of exchange, the more demand there will be for it, and with supply being fixed, growing demand will be reflected in a rising price.[1]
The naive souls who recently bought bitcoins to make a 'quick buck' are in for a rude surprise. In the short run, no one knows how Bitcoin's price will fluctuate.
In the long run, however, if Bitcoin continues to work as intended, the more people around the world who adopt it as a store of value and/or medium of exchange, the more demand there will be for it, and with supply being fixed, growing demand will be reflected in a rising price.[1]
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[1] My full thoughts on the matter: http://cs702.wordpress.com/2011/05/29/on-the-potential-adopt...