It really is entirely psychological. Based on the two main theories of stock investing: fundamental value and castles-in-the-air speculation, with Bitcoins, it's hard to gauge its real value as it may be argued that it doesn't actually have one. Being an asset that does not produce any profit, it's hard to put a number against it. So therefore the price is driven by demand and by what the mass wants it to be worth and by what it hopes to be worth in the future.

Speculators coming in the Bitcoin ecosystem now are willing to spend a lot of money on it because they know that there will be someone else that is willing to spend even more money on it. It's all driven by mass psychology, exactly like many of the previous bubbles in the history of stock markets: tulip bulb craze, dotcom shares, Japanese land value and so on.

The only thing is... it's very hard to predict the randomness of mass psychology. Everybody wants to get rich.. and everybody wants the price to go up and up... but when they start to sell in order to cash in, the price will drop and if a lot of people do it at the same time, panic will set in and then it will crash seriously. You may argue that the whole thing behaves a bit like a ponzi scheme (with the main difference that there is actually something happening underneath the whole speculation-investing-money aspect, which is, IMHO, the very elegant blockchain technology)