Perhaps he was just so desperate for a fix he knew he could get some money from you by signing over the bike. Sure, he made a very bad deal but he got $500 which should keep him high for a bit. In my experience addicts aren't good long term thinkers; more concerned with what they can get right now as opposed to having to wait for something better in the future.
I hope he's not planning on suicide. Sending prayers your way.