In theory it can go 2-4 orders of magnitude higher. The value of all bitcoin now is about the value of a dozen tons of gold, or about 1% of the gold backing SPDR. Bitcoin is still minor-league, but it's knocking on the door of being significant. It will be interesting to see if any major governments freak out about bitcoin, or if any governments embrace it for, say, selling oil.

It's just a commodity, why would Governments freak out about a commodity?

Whether or not bitcoins are currently in a commodity bubble or not is speculation, but bitcoins are no more a currency than Iron, Gold or Tulips are.

In theory commodities can go to very high heights indeed.

"There are people on many sides who want Bitcoin to fail, and who will do anything to stop it from growing. The banks hate it, because it will disintermediate and replace their business. The Statists dont like it because it will defund their socialist dreams. The gold bugs loathe it because it is not gold. Keynesian journalists bristle at the fact that the money supply in Bitcoin is limited, and dream of seeing it destroyed."

Very interesting read[1] nonetheless.

[1] http://it.slashdot.org/comments.pl?sid=2875465&cid=40120...

Governments do freak about gold though.