The same argument actually also applies to stocks, especially since currency these days are just promissory notes--a dollar has value only because people believe that it can be traded for something else. Banks create money out of thin air whenever they make a new loan--the value of that money is only as good as the promise to repay it, at which point the money vanishes. Trading stocks or currency is theoretically a way to determine value, but as you point out, it is easy to game the system to manipulate the price if you have enough money to make a big movement. When this happens, the price is no longer tied to any real value.