The Pi Core Team (PCT), which oversees the Pi Network, is taking proactive measures to safeguard the value of Pi Coin in the volatile cryptocurrency market. In a decisive move, PCT has initiated the purchase of millions of Pi Coins from centralized exchanges, creating a dedicated sub-wallet aimed at stabilizing the currency’s price. Reports suggest that this intervention is critical to avert potential devaluation following the release of Pi Coins into circulation.
Recent Acquisitions Raise Questions
Recent analyses reveal that the newly established sub-wallet has acquired approximately 48.5 million Pi Coins in a remarkably short timeframe, equivalent to about $31 million. These actions by PCT are seen as a novel approach, diverging from the conventional practice of reducing token supply through “burning.” However, financial experts warn that this endeavor may only serve as a temporary fix.
By actively purchasing coins, the sub-wallet effectively decreases the circulating supply, mitigating downward price pressure. While this tactic prevents immediate price drops, concerns linger regarding its long-term viability, especially regarding the sustainability of funding for these purchases.
Temporary Gains or Lasting Solutions?
Currently, the price of Pi Coin has increased by around 6%, stabilizing around $0.6. This uptick in trading activity may reflect growing market confidence in PCT’s strategy. Nonetheless, analysts caution that the benefits of this approach are unlikely to last.
Experts suggest that the PCT’s strategy creates a temporary “buffer zone” against sudden price declines. However, doubts persist about the long-term effectiveness of these measures, particularly as more tokens are unlocked and potentially require further intervention.
While some investors remain hopeful for a price surge up to $5, concerns loom over a potential drop to $0.3 if PCT halts its purchasing efforts. This scenario highlights the reliance of the market on artificial stabilization methods.
Questions arise about PCT’s funding sources for these acquisitions and whether a more sustainable plan is on the horizon. Investors are advised to approach the situation with caution, remaining strategic to navigate the fluctuations in the market effectively.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/can-pct-maintain-pi-coins-market-stability