I'm curious, are there any academic level economic arguments that discuss Bitcoin and it's future? I'm really curious how economists are viewing Bitcoin.

Right now, it is clear that the rise in price is due to investors who see the potential of Bitcoin, thus they are hoarding Bitcoins in anticipation of future avenues that could accept Bitcoins.

All it will take to unleash liquidity in the Bitcoin market will be a major online retailer to announce they accept Bitcoins as a currency. Otherwise, the vast majority of Bitcoin transactions will be trading in iliiquid markets and paying for underground goods and services. Bitcoin isn't going to shake up the traditional goods and services market unless a major online retailer signs up.

... and with a very illiquid market and an immature set of market makers in the currency, it is going to be a while before Bitcoin is legit. Not to mention potential regulatory issues that WILL crop up at some point.

Bitcoin - good luck. I think it can work, but will it work is a whole different story.