Is it practical to set an artificial floor price for trading in currency markets?
On the other hand, the most significant problem comes when a currency in a market is being traded for an extremely low price. Traders don’t want low buy and sell rates; they want high rates. If there is no actual market evaluation, many individuals want to find their own solutions to this problem, and conflicting opinions on which solutions are effective causes further disruption to the development of a given cryptocurrency. One solution involves setting a minimum buying/selling price. This would prevent the price of the cryptocurrency from being lowered even further. Many people agree, but many people also strongly disagree. We ourselves attempted to raise the price of Sweatcoin subliminally, and felt that people becoming aware of ostentatious trading we openly discussed would essentially initiate others to follow in the same suit. However, there was large opposition to this, and it would appear that a crypto without a blockchain would never naturally increase, as there will always be new people oblivious to a typical trading value, who will be manipulated into selling for less than they are worth.
The recent boom in the cryptocurrency industry has helped revolutionize global economics and is believed by many to be the way of the future. The issue with it, however, is that centralized currencies such as USD, GBP and EUR, is that the market wants control of the money. This leads to cryptos being created for the sole purpose of doing ‘pre sales’ for short term profit over long term investment and viability of the crypto. Artificially setting base prices on cryptos can solely encourage this greedy behavior, and can easily create abused practices. These practices go against decentralization, the fundamental idea of cryptocurrency and can produce results contrary to the goal: centralization. However this detriment can not be blamed on governments, with cryptocurrencies big banks and heavy investors are to blamed. This issue leads people to believe there shouldn’t be a price floor, as it not only goes against the idea of cryptocurrency, but also creates a negative stigma and apprehension around cryptocurrency.
The following opinions are written by various people anonymously to provide some examples of why people encourage/discourage setting base prices:
I think that they go against the entire idea of anything that has ever existed even slightly related to a marketplace because everything is built on a free market, commodities, stocks, etc. A minimum sale price just ruins everything, and it ruins what this country and what every country in the world is built upon, capitalism.
“In some markets that haven’t been fully developed, it would be better to set an artificial price if there is nothing to judge a price off of. This would help to stabilize the market price temporarily, but only until the market fully develops.”
“In many situations such as crypto the price is often incorrectly and unjustifiably set at certain prices that ignore the sound judgement of factual evidence made apparent by the hardcoded features of a particular coin. Sometimes an artificial price can stabilize markets and bring investments that would otherwise not come due to the coin being classified as high risk.”
The truth is, there is no clear answer to this matter. It is still being actively debated on many platforms so if you thought you were going to get a simple YES or NO as an answer, you were wrong. Feel free to comment your stance on this matter below.
Written by @tbaumer2 and @biggiecheese in collaboration with members from the Unofficial Sweatcoin Exchange server on Discord