Litecoin does not have the same utility as Bitcoin because of the simple reason that you can pay / receive payments from a lot more people with the latter. Ultimately any market price depends of supply and demand, but the day we can send/recive/pay most people/companies with Bitcoin is the day we will have stable (and high) prices. Bitcoin will then have higher utility than Visa, PayPal, Western Union, SWIFT etc.
I don't necessarily expect that fiat currencies will ever become non-volatile with respect to Bitcoin. In the event that the supply and demand of Bitcoin grows; the supply and demand of the fiat currencies will shrink over time.
You may see price volatility still, when you are comparing Bitcoins to fiat at that point, due to the instability of the value of the fiat currencies as a whole, and the relative stability of the value of currencies such as Bitcoin that have a physically fixed or mathematically predictable supply ----- and then, demand only fluctuates with the economy and the health of the network.
Yes. The bitcoin protocol may need some major changes, however, to ever conduct a tx volume approaching Visa or Paypal's; there are surely problems and pain points involved with scaling that will need to eventually be encountered and then addressed by future work in the development of bitcoin protocols and software.
So a positive but manageable rate of growth is key.
More users and more merchants accepting BTC for goods and services coming on board are a fundamental requirement, before Bitcoin begins to become more mature and more valuable.
In the long run it's actually not interesting if it's volatile in respect to fiat, what's interesting is stability in respect to the goods I can buy. Maybe in the (distant?) future, the tables will be turned. We will know more or less what we can buy for one Btc, whereas we really don't know what one usd will will buy us. That's when the old farts and laggards finally cave in and give up on fiat. Here's to hoping
