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In a recent series of exchanges on X, prominent XRP community influencer, Crypto Eri, addressed the controversial theory that the XRP price can be artificially set by a central authority. The debate has ignited discussions among enthusiasts, experts, and Ripple insiders.
Eri’s initial tweet emphasized the decentralized nature of cryptocurrencies, stating, “Decentralized crypto-assets like XRP, cannot be ‘price set’. Price is determined by supply & demand dynamics in the global open market, sometimes with Influence factors like trading, sentiment, adoption, news & liquidity.” She further warned against the “deceptive false price hype” that has been circulating within the community.
Can XRP Price Be Set?
In a hypothetical scenario presented by a user, the idea of “setting the price” was explored, suggesting that if a powerful entity like OPEC decided to trade a barrel of oil for 1 XRP, it would effectively set the price. Eri responded, “Granted, artificial price setting has been tried, but If the price is above the equilibrium level, then the quantity supplied has always exceeded the quantity demanded… In the Crypto Market, you can’t ignore arbitrage.”
Khaled Elawadi.XRP, another community member, argued that the tokens price could be set in different ways, either directly by Ripple or by determining a face value through various parties. Eri swiftly countered, clarifying the distinction between XRP, the XRP Ledger, and RippleNet, a software solution created by Ripple.
She emphasized, “Fact 1: The digital asset XRP is not a unique software product… Fact 2: Ripple does not control XRP or the Ledger… Fact 3: Ripplenet is the name of a software created by the Company Ripple, that can use XRP (or any asset) in a solution.”
Jesse Hynes, a renowned community lawyer, humorously questioned the persistence of the price set theory, “Are people still saying that there’s going to be a price set?”, to which Eri simply replied, “Yes.”
Neil Hartner, a Senior staff software engineer at Ripple for On-Demand Liquidity (ODL), weighed in on the debate as well, questioning the logic behind two parties artificially setting a price, stating, “Why would 2 parties do that unless they want to lose a lot of money? Unless those 2 parties are willing to defend the price and not run out of money, it won’t last.”
The debate took another turn when Vandell Aljarrah, founder of Black Swan Capitalist, drew parallels between XRP and gold, suggesting that the token could achieve a stable value similar to gold in the future. He cited the capped supply of 100 billion tokens as a potential factor for increased demand as the market matures.
Another perspective emerged from a community member who believed that a decentralized asset’s price could be pegged or fixed, drawing comparisons to the former “gold window” of the Federal Reserve. They posited that entities like the IMF or Ripple could act as central authorities in such a scenario.
As the debate continues, it’s clear that the community remains divided on the issue. While some believe in the potential for a centralized price setting, others, like Eri, firmly stand by the principles of supply, demand, and market dynamics.
At press time, XRP traded at $0.4806.
Featured image from iStock, chart from TradingView.com
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