If something like this was attempted, and the price started to rise I think we would see many more people (and possibly funds) flock to steem and buy steem as well, which would further drive up prices which would attract more attention and more people would buy etc etc etc. I get what you are trying to say here, but I don't think the scenario would work out quite how you are portraying it to in your example.
The other thing to keep in mind, once that hedge fund has $700 milllion powered up and can make $25 million per year, they have to keep that 700 million powered up to keep making that amount. Them dumping all that steem on the market couldn't happen for at least 3.5 years for them to even make a tiny profit on their original $84 million invested...
Unless the plan was simply to run the price up and then cash out based on the capital appreciation, but that is more along the lines of a simple pump and dump and very different than what you are talking about here in regards to powering up that $700 million...