I don't get it. People invest Bitcoin with Pirate. If he sells the Bitcoin it drives the price down, how does he drive the price up without using his own money? Is there a new leveraged short-selling exchange?
There are several, but none as big as bitcoinica was and certainly not enough to take a volume pirate would need.
There isn't as much to get about it, people buy BTC in order to give them to pirate. He accumulates them and pays out interest. If it is a straight Ponzi it makes sense the price is going up before the default.