RE: Post-Hardfork Steem - Calm Before the Storm?
They can't force volume, but they can maintain price. If people don't see the point of selling below 0.05, then the price just won't get to the 0.01 that might be attractive to many buyers. It will stagnate at 0.05 with few sellers and few buyers. i.e. low volume. That's actually what we've been seeing for a long time, but with a more or less steady declining trend.
If no one sees the point of selling below 5 cents or 10 cents or whatever, then the price won't go lower than that and you can absolutely hold the line and maintain price.
If almost no one sees the point, then you'll see precisely what you are describing. Sluggish volume and a relatively gradual downward trend.
That is to say, whales can build a dam of 10 cent asks or 5 cent asks or whatever, and refuse to sell below that level. But the dam will leak when as little guys pop up and want cash now and just accept the highest available bid (or pop up on the ask side and front run the whales). My gut tells me the system is too big to do anything about that leak. I don't see it being feasible to convince everyone to stop selling, or even almost everyone.
There are enough people on the platform that need the money (or are just willing to take the highest price they can get regardless) so that the volume that trickles past is what is going to move the price point. IN a low demand environment where 95% of the money isnt moving because the major holders don't want to sell, the market price is going to be set by the 5 percent who are selling.
You have a point though that there comes a point where its no longer worthwhile for the little guys to sell either, at a certain price point what they would get from selling their relatively small powerdowns and rewards is too trivial to be worth the effort. Or, to phrase it a little more positively, the upside potential of a rally far outweighs the immediate rewards of cashing out.
ll told I think you get much better redistribution at high prices with high demand than low prices with low demand. Of course, that isn't something you can choose.
Its kind of chicken and egg. To get high prices and high demand, there needs to be a significant level of growth. And to get significant growth there has to be better distribution. Though, both of the previous two statements are purely my subjective opinion. Im sure there are many who would argue that we can have high prices and high demand with the current size of the ecosystem just due to market speculation.
The price would not trend lower if the small number of people who do continue to sell are matched by a small number of people who continue to buy. This would be low-volume constant (or nearly-constant) price and exactly what you see for a large number of 'zombie coins".
The point is not that volume would drop to zero, but the little guys or occasional whale towel thrown in, along with the usual trickle (e.g. from rewards) are not enough volume to accomplish distribution on a useful timescale. (And to the extent that it does, as I mentioned earlier, it will likely distribute coins to a small number of buyers, not a large number; in a low-volume, low-price environment, where would a large number of people with an interest in buying come from? Nowhere.)
Then IMO it is probably a good idea to just give up and conclude that launching in the manner this was launched was a fatal error, with one caveat. I don't see lower prices, or even reasonably stable prices, as aiding in distribution before this all becomes so old and leapfrogged by newer and better projects as to be irrelevant. The caveat concerns the steemit account, which both contains enough to meaningfully affect distribution and was intended to accomplish distribution regardless of price (mostly by giving away coins). If this is done effectively, and in a reasonably expedient manner, then the distribution can improve before price does.
I don't entirely agree that growth necessarily requires distribution first, but it does require something other than what has been done so far.