Gresham etc.

Gresham's law is for when people are required to accept the 'bad' and 'good' money equally; then people will hoard the good money and transact exclusively in bad. When the coercive requirement is not satisfied, one ought to expect good money to drive out bad, or else they will float related to the risk, ease of acquiring it, etc. See http://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham.27s_Law_.28Thiers.27_Law.29

(And if people are worried about the euro, they can hold other currencies like the deflating yen; if they are worried about dollars, they can hold euros etc)

Not the right term for what's happening. Deflationary spiral refers to low demand reducing prices, which reduces production, which reduces the employment rate/average wage, which reduces demand. The bitcoin economy is not large enough for this to be the case. Rather, it appears to be a speculative bubble, where people predict the price will go up, so more people buy it, and so the price goes up, etc. Then enough people at once go "this is as far as the train's going" and everybody panics and tries to sell and the price crashes.

Since bitcoin is a currency experiencing deflation due to a cyclic process, "deflationary spiral" would sort of make sense if it didn't already refer to another specific phenomenon.

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