Trust is virtual.  If you have a bitcoin and somebody else is working to trade you something for it than it has value ... in this case the bitcoin cost is what you and who you trade with value what was trade.  That works with anything; currency, services, products etc.  Further, trading bitcoins for a physical ounce of gold today, while not tied to any currency does give you a spot value of worth in any given currency as gold is priced in just about every currency in the world.  As long as people have trust in transactions and trust that bitcoins can't be counterfeited (thus inflated), then virtual or not it has value.  Really, what backs the USD?  What backs gold?  Gold only has value because people desire it for various reasons such as using it as a conductor, jewelry, beauty (that does not corrode) and extreme maleability, and if course as an investment (since it does have value).  Fiat currency is at an extreme disadvantage since it is also based on trust (except governments keep printing more which inflates or devalues all of the same currency proportionately).  People cannot trust their government not to print more money at will (thus stealing from those who have said currency).  There is no intrinsic value in the USD beyond the fact it is massively used in trade and traders (that would be everybody who uses USD) have faith that the dollar they received today can be spent as a dollar tomorrow and it will have very nearly the same value (so it is stable over the short term).  The U.S. government is letting it's citizens down however (and that includes me), because they are still openly printing new money and give it a nice name which makes it sound legitimate; "quantitative easing".  This is nothing more than stealing value from the USD market cap value (anybody who uses USD) and either giving it to institutions they want to support but otherwise had no money to do so and (not really or) devaluing a given quantity of USD.  Since the U.S. government us in debt up to it's eyeballs, this serves to devalue what they owe, so major lenders to the government are losing on any long term loans and the rest of the economy based on the USD will raise prices to compensate.  That can't really happen to bitcoin as there is no way to simply make more at no cost.  What to keep in mind though is that the initial bitcoin currency is still being "printed" via mining and thus value must be considered with that in mind, and thus trust (or faith) that their will be no sudden influx of new coins from nowhere causing devaluation like occurs with fiat currency.  The Mtgox fiasco where the price dropped to nearly zero (I never did check out the low price on that) was an emotional reaction where they lost faith and valued it themselves as not worth much and sold it.  If any would have thought even a moment about it, if 6% of all coins hit the market, why is there value any different to you?  They were there all the time, just not for sale.  It may cause a price swing if the person selling these valued them little and sold them at that value.  A temporary change if those who remain retain their trust in the value of the bitcoin.

Even without Mtgox reversing trades (blah!) the market has already shown that it values them in spite of that sell off.