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Still not sure about that. If you have to pay tax for it it's just another currency. A currency with cool features! But I'm not sure if this is the end. I think something better will come after bitcoin.
Exponential curves are to be expected for any value whose growth rate is positively correlated with its value - essentially, when you have positive feedback loops where the more you have of x, the faster x grows, which causes you to have more of x, and so on. In this case, Bitcoin price growth made it more popular, which caused more people to start investing in Bitcoin, which further increased its price. The exponent…
You say that "Bitcoin['s] price growth made it more popular." I guess my issue is what you mean by that. When people see Bitcoin's price shoot through the ceiling, I totally agree that it attracts them to speculating on the currency, further exacerbating the increase in price, causing an exponential shape. It is not clear that its price increase would attract people to using Bitcoin as a currency and not speculation…
I believe that, like you mentioned, it depends on Bitcoin's utilitarian value as a currency. If it turns out Bitcoin is more useful than, say, Paypal for facilitating actual transactions (as opposed to being a pure investment vehicle like it's being used now), then its price should encounter steady growth. If not, then things will get interesting.
And more on it's market irregularities (take for example the inability to withdraw USD via the SWIFT banking system without a 6 month delay from MtGOX)
It makes "price discovery" in the sense of a true currency valuation very hard to estimate, and the illiquidity makes the instrument very prone to HUGE run-ups and sell-offs. I actively trade it, and believe that a price target of over $1000 is a strong technical possibility. Though what it "resets" to after this run-up is anyone's guess.