The Controversial Theory: Can XRP Price Be Artificially Set?
In a recent series of exchanges on X, Crypto Eri, a prominent XRP community influencer, addressed the controversial theory that the XRP price can be artificially set by a central authority. This debate has sparked discussions among enthusiasts, experts, and Ripple insiders.
Eri’s Stance on Decentralization and Price Determination
Eri emphasized the decentralized nature of cryptocurrencies in a tweet, stating that decentralized crypto-assets like XRP cannot be “price set.” She argued that the price is determined by supply and demand dynamics in the global open market, influenced by factors such as trading, sentiment, adoption, news, and liquidity. Eri also warned against deceptive false price hype circulating within the community.
Exploring the Hypothetical Scenario
A hypothetical scenario was presented where a powerful entity like OPEC trades a barrel of oil for 1 XRP to set the price. Eri responded by acknowledging that artificial price setting has been attempted but explained that if the price is above the equilibrium level, the quantity supplied exceeds the quantity demanded. She emphasized that arbitrage cannot be ignored in the crypto market.
Clarifying the Distinction: XRP vs. RippleNet
Khaled Elawadi.XRP suggested that Ripple or various parties could set the token’s price directly or determine a face value. Eri clarified that XRP, the XRP Ledger, and RippleNet are distinct entities. She stated that XRP is not a unique software product, Ripple does not control XRP or the Ledger, and RippleNet is a software created by Ripple that can utilize XRP or any other asset.
Questioning the Persistence of Price Setting Theory
Jesse Hynes humorously questioned the continued belief in the price set theory, to which Eri simply replied, “Yes.”
The Logic Behind Artificially Setting a Price
Neil Hartner questioned the logic behind two parties artificially setting a price, suggesting that they would lose a lot of money unless they are willing to defend the price and not run out of money. This highlights the impracticality of such an approach.
Parallels with Gold and Potential for Stability
Vandell Aljarrah drew parallels between XRP and gold, suggesting that XRP could achieve a stable value similar to gold in the future. The capped supply of 100 billion tokens was cited as a potential factor for increased demand as the market matures.
Debating Decentralized Asset Price Pegging
A community member proposed that a decentralized asset’s price could be pegged or fixed, likening it to the former “gold window” of the Federal Reserve. They suggested that entities like the IMF or Ripple could act as central authorities in this scenario.
The Divided Community
The debate continues, with the community remaining divided on the issue. While some believe in the potential for centralized price setting, others, like Eri, firmly stand by the principles of supply, demand, and market dynamics.
Hot Take: XRP Trading at $0.4806
At press time, XRP is trading at $0.4806.
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