Its called a Deflationary Bootstrapping Economy. A startup currency. A currency isnt good unless it is widely used. Bitcoins become widely used by providing the speculator reward incentive to be an early adoper and spread their use. Its a key feature that will make it successful.
As long as the market is growing , the price will continue to be high volatile. As long as the trend is exponential increases in value, bitcoin will continue to be an amazing investment. Plenty of price guarantee services are already available to help those who cant deal with the volatility.