Fiat currencies are backed by governents and the whole economy that uses them. Which is why they've been so successful throughout history. But even some of those fail. Bitcoin is truly backed by nothing but faith When faith wobbles, governments can try to step in to save their currencies (see the Euro for a recent example) - there is nobody to save Bitcoin.
Bitcoin's also a bubble. Because people are backing it as an investment, but there's no possible return but other investors. And that very process has destroyed its use as a currency, as transaction costs are now so ludicrous.
But bubbles pop when they're ready to. This is what makes them so dangerous. The people that see it, get told they've been "proved wrong" and so ignored. Until they're finally proved right later. I think it was UBS that sacked their CEO partly for refusing to buy all those nice mortgage backed CDOs in the last decade - and thus forgoing juicy profits. Did they apologise and re-hire him in 2008 after he was proved right?
To quote John Maynard Keynes, "the market can stay irrational for longer than you can stay solvent."