What will happen with the price in the short, mid, and long term?
As with anything, market predictions are never safe to make. We do not guarantee any expectations of price action or offer “investment advice” . There are an infinite number of factors that influence markets, and every investor must perform their own due diligence before investing their money.
The Dynamic Peg is designed to remove some very significant influences (such as whales and large price manipulators) which are all too common within cryptocurrency markets. It allows BAY to continuously search for a fair market value, and creates a place where both investors and platform participants can mutually benefit.
In our opinion, we expect several months to pass before a consistent fair market value (FMV) is discovered. The Dynamic Peg is a brand new concept which has never been attempted before… it essentially functions as a decentralized and democratic “Federal Reserve”. There is no telling how much capital will be directed towards such a robust and valuable system like this.
Bitcoin currently takes 2–4 years to complete a market cycle, as it slowly seeks to facilitate price stability and become a medium of exchange rather than a speculative store of value. We estimate that BAY will be able to complete market cycles within a few weeks. With these shorter-term cycles, investors should feel much more comfortable hodling through the “low” periods. This would lead to reduced sell orders on exchanges. The dynamic peg allows voters to freeze bearish manipulators’ liquidity by nearly 100%… in as little as 10 days. With fewer sell orders, these large players then loose incentive to manipulate BAY, and move on to other, more malleable cryptocurrencies.
Although future demand is impossible to predict, there are several Dynamic Peg features which incentivize demand for BAY. As these mechanisms work over time, we look forward to seeing the volume of BAY increase as well. We anticipate that this increase in volume will eventually arrive at a point where no more than 50% of the supply needs to be Reserved in order to stabilize price. Under this scenario, we see a stability level in which institutional investors feel comfortable and want to enter.
The long-term is even more difficult to predict. However, as more institutional investors enter the picture, and new innovations of BitBay satisfy a steady flow of demand, we hope to see a very stable ecosystem. Ideally, stakers would never have to freeze more than 3–5% of the total supply. Institutional investors seeking to make large transactions could do so with trustless OTC smart contracts (already built into the BitBay Markets Client), thus limiting any major impact on exchanges.
Questions, comments, concerns? Please post them in the comments below!