Price is just a proxy for value.  Before there was a price on an exchange, there was still stored value.  It was harder to quantify, but it still conceptually existed, and would fluctuate with need.  Without even buying or selling actual goods, the demand for novelty was enough to support the very low value per coin at that time.

At $5, you need a lot more than novelty.

Yes, I'm basically modeling it as a transactional currency, and considering the store of value as one aspect of a transaction (all stored value is intended to be spent eventually).  That's basically true for now: the value is too unstable to be a reliable value store, so people seeking a transactional currency won't store much money in BTC.

That's a weakness in the model: a very large and hard to quantify part of the formula is the amount of BTC held long for speculative value.  The actual transactions are small, and the computed value can vary a lot depending how you fudge the variables.

On the other hand, that's also it's strength: any attempt to compute the value based solely on the MAIN current use of Bitcoins (as a speculation vehicle) is completely detached and self-referential, and can be used to justify any price.  Off to the moon we go.

Edit:  Oh, don't get me wrong.  It's going up short-term.  I just don't see it lasting for more than a few months before reality sets in again.