I beg to differ.  SR is a real marketplace, maybe not the best for PR but it is real commerce.  Bitpay announced $5M in sales last month.  Satoshi Dice does some significant volume.  Other gambling sites have taken a look at Bitcoin, CC fraud on gambling sites is a huge revenue drain.  Our small company sold almost $600K in bullion in the first quarter of this year, I have no hard numbers but I would guesstimate that all Bitcoin bullion sales combined are at least a million a month.

Sure it doesn't warrant $260 valuations but Bitcoin (the protocol itself) has proven it works.  VC companies have put money into companies like BitInstant and BitPay.  Better companies = more demand for Bitcoins.  I would find it hard to believe that the same VC dumping millions into companies wouldn't buy the crashes.  It is a way to gain additional exposure at potentially better valuations.

Still all the above is just my opinion.  I guess anything is possible but I just don't see it happening (outside of major events like the ones listed above).  I think even without the media hype, and speculative bubble (both times) Bitcoin would be valued >$10 right now.  I mean that is only $110M which when you think about it for an entire planet is a pretty trivial sum.  The gold in world of warcraft is probably worth almost that much (despite Blizzards rampant gold inflation).