Maybe I should read up on history. Can someone point me to something in history that meant trouble and triggered all the regulation we have in the "regulated" markets?
http://en.wikipedia.org/wiki/Silver_ThursdayIt's one of my biggest fears I have because it could work with bitcoin given the limited and well known supply.
Thanks DaSheep. I though this was interesting:
"But on January 7, 1980, in response to the Hunts' accumulation, the exchange rules regarding leverage were changed, when COMEX adopted "Silver Rule 7" placing heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets."
Seems it was a change in COMEX regulation that triggered the panic.
I fail to see the "bad" the hunt brothers did. So they borrowed money and bought huge amounts of silver. That drove the price up. Then regulation was changed to screw them over (this was quite a "bad" move in my mind).
Is that possible in Bitcoin (buy up most of it and corner the market). Yeah, sure. Will it work as intended? I doubt it.