"nobody has inside info"
It is not known who are making all the trades, wouldn't it be possible that a small group of large bit-coin holders are simply trading between each other in an effort to inflate the price... they have nothing to lose.
It is not known who are making all the trades, wouldn't it be possible that a small group of large bit-coin holders are simply trading between each other in an effort to inflate the price... they have nothing to lose.
The exchange rate between BTC and USD is only affected by trades between the two currencies. Now the relative illiquidity of some of the major exchanges ( mtgox especially ) and the fact that it's relatively difficult to find counterparties definitely contributes to the volatility.
If we were colluding to push the price up, we could both coordinate large buy/sell orders and dump them into the market adding volume and shifting the price a bit... people watching just see trades and see the price moving, thinking its credible trades...
I could be wrong, but if market buy orders take the lowest offered, and market sell orders take the highest offered I think it would work as I imagine.
This means those two parties now have a bunch of cash on hand and still hold a lot of BTC, they could now set a bot to continually put buy orders in at an escalating exchange rate. Also sell at an escalating exchange rate. Every now and then execute a large trade to push some volume into the market... it wouldn't work for every trade as normal people would jump in and buy or sell and take their cash/BTC... but on a long enough scale I think it would work.
the trading fees ?