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I believe the reasons are that it's A) decentralized B) portable C) easy for businesses to adopt

The liquidity part of it is a big factor, but we've had pretty good liquidity for a while if you're willing to do a bank wire or trade with someone in person.

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Those features are all well and good, but the only reason a business would be interested in accepting them is because they can convert it back into <currency>. There aren't enough other businesses accepting bitcoins, especially ones providing complex/critical services, for them to simply accept bitcoins with the expectation of using the bitcoins themselves for further trade.

It depends, it's value is to some extent determined by an expectation of the amount of businesses that will begin to accept it for some things which is a factor again determined by it's expected value.

In other words it will hit an equilibrium value where the price modifiers in both directions balance each other, but nobody knows what that is.

Think it more like how the value of a futures contract might be determined.

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