Like so many discussions on Bitcoin's value, you're conflating the currency/technology with the currency's value. Bitcoin is inflationary; it's exchange rate is not. The exchange rate is influenced by news and psychology, and fiat inflation has very little influence on the price. I'd call that a weak foundation, and much of what we've seen in the past may not continue (anonymous drug sales, lack of government regulation, etc). Bitcoin has several years before it's an inflationary hedge, but in the meanwhile, it's a great speculative play with potentially unlimited upside. There's also an unlimited number of events that could occur in the next twelve months to destroy its exchange rate.
