It might settle down. It also might not settle down. BTC might lose popularity in favor of an altcoin. We don't know yet. We're in completely uncharted territory, nobody knows for sure what is going to happen.
Yes, it's possible, but not likely. There's a ton of infrastructure behind bitcoin. Tons of news coverage. Tons of debate. Nobody is aware of the second biggest coin - litecoin.
IT will always be well - I'm talking about people who put their savings into vaporware stocks. I'm not sure why everybody is giving Tulip Mania as an example when DotCom is away more similar to Bitcoin. I even thought about a version of Bitcoin, which is based on stock. You create a vaporware corporation and use its stocks as a currency, well, commodity. :)