The true believers in bitcoin should be buying up all the bitcoins they can while they're this cheap. There is no asterisk on Bitconica's buy side, and anyway, true believers would use their own cash to reaffirm their convictions.
Can't I believe in bitcoin and want to profit? So far I haven't, but I'd like to.
If I sell at $7 and buy back at $5; then am I damaging bitcoin in some way?
I think it's dangerous to put ideology into a currency. If everyone uses bitcoin to maximise their own profit, then good will emerge automatically (Adam Smith told us this 200 years ago).
Those people bouncing the price around, with presumably large amounts (to us) of cash will one day find that bitcoin has started to take hold on a massive scale and they will lose money on a bounce. Then on the next bounce, and again, and again. I wouldn't be surprised to learn that they are already losing money every bounce.
I don't think they're doing any harm to bitcoin long term anyway. Seriously, while the bitcoin economy is still small, it makes very little difference whether the price is $4 or $8. If it becomes mainstream, then the price will need to be in the hundreds of dollars (FOREX does $4 trillion a day); and that will happen all on its own.
