Bitcoin does have some unique things about it that are contributing to the price volatility, but most of the volatility is caused by there being little market depth. When there's a somewhat large purchase (or sale) of Bitcoins, this causes a wide fluctuation in prices. If Bitcoin were much more widely used, the amounts bought and sold would have to be much higher to cause this much volatility. The effect is similar to what happens in the currency markets; On pairs where there is low market depth, new money coming into the market (or any large selloff) causes big price movements. When more people and businesses start using Bitcoin the price volatility will decrease.