iii) Conversion to more stable values stores is always an option. If I sell my BTC and convert to fiat as soon as I sell my goods there a lot less risk. It's important to remember, fiats can go up and down too. The UKs brexit referendum dropped GBP by 20% over a few days and this affected importers significantly. It's not BTC level volatility but just pointing out there is no ultimately stable currency.
While it's true that all currencies fluctuate some with respect to each other, in general, 1% in a day for a fiat currency is an outsized move. Bitcoin can change by that much in a minute at times of high volatility.
(Maybe BTC will become the ultimately stable currency one day? once everything has been mined and there a no more forks its possible BTC becomes ridiculously stable. I'm not really sure this is likely and it's not necessarily easy to define what stable actually means, for now it means compared USD but that may not always be the case.)
I think that something is going to have to change fundamentally for bitcoin to stabilize in price. The biggest problem right now is that there's no good way to determine how much a bitcoin is worth--it doesn't really have any intrinsic value. The value of fiat currencies is at least more or less determined by the economy of the country that's represented by the currency. Without some kind of economic system that's represented by bitcoin, I don't think it's ever going to become as stable as a fiat currency.