This actually would not be farther from a free market. Your example would be that exactly two people would be manipulating the market/price of bitcoin. A free market is when the natural forces of supply and demand set the price of something.
You are correct. That was not an example of a perfect capitalist market. That was an example which might occur in a market that actually exists, a practical implementation of the free market if you will. It is of the same kind of manipulative transaction that may lead to a bubble, aka what you're looking to cash out on - which, by the way, does not help the market.
Watch the daily transaction volume if you want to get a feel for Bitcoin's valuation as a payment processor. Watch USD if you want to know where exchange rates will go. Watch the news if you want to see a bubble, then watch the entire Bitcoin economy curse when the price normalizes.
I do not like these "Why isn't my BTC worth m0@r??" threads when we should have "When will Bitcoin be used for corporate wire transfers?" threads. They're essentially the same question, but one is infinitely more intelligent than the other.