Great post, thank you.
You're absolutely right that you need dominant position, concerted action or cheap credit to be successful at manipulation. In the case of bitcoin, cheap credit is eliminated which is a major factor in real world economy as you can not create bitcoins from thin air like banks are doing with dollars and other currencies.
As far as dominant position goes I do not think this is that easy to achieve without the cheap credit. Even when some people probably do have significant holdings of bitcoins I do not think they could manipulate the market to such a degree even if they wanted to (but they may contribute a great deal).
So what seems to be happening is spontaneous concerted action of multiple independent people triggered by the same impulse and that is desire to make some profit from the apparent rising value of bitcoin. The problem is that the rising value may be just a reflection of higher demand caused by these people wanting to speculate. That means that the real value of bitcoins without the speculative factor is unknown. What introduces a problem is that this speculative portion of value is only virtual, it goes away the moment there is a dip in a value and people start selling like crazy all at once crashing the value to significantly lower one. In this process a lot of people are going to loose their money to the ones who had better information and sold first (most often just few insiders).
That's why I'm saying that this kind of speculation is extremely bad for the market, it makes it unstable and distorts it causing all kinds of great problems (even serious ones like starvation). It is always going to be happening on some level but as long as it is overwhelmed by real markets it's not a big problem as its effects are very small.
BUT if people accept it as legitimate way to make money (as seems to be happening on this forum) and a good portion of the economy participants start to "make money from money" it can snowball to such an extent that is destroys the economy as we can see on our real one.
The only way to stop that is to realize that you produce nothing by doing it, you can never produce value and if you make money you take it from someone else who got screwed - this may be another speculator or regular producing trader ... therefore it is bad thing to do and we should make honest profit from producing goods and services that people actually desire and which help them in their life. The solution in my view is to make sure that the real economy is dominant over the speculative one, always striving to make the speculative one as small as possible. It can not be eliminated, but it can be made insignificant by educating ourselves and others that it is harmful and stay away from it.
So next time you see someone offering you good "investment fund" kick him in the nuts for trying to destroy the economy
