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submitted 11 months ago* (last edited 11 months ago) by shortwavesurfer@monero.town to c/monero@monero.town

We all know that 1 Monero is always equal to 1 Monero. However, since we don't currently live in a world where Monero is the unit of account we have to deal with volatility between Monero and fiat shitcoins. My thought is to ignore the "current price" of Monero in favor of using the averages such as the 50 day simple moving average.

why the 50 day and not longer or shorter?

The 50 day average is a medium average of Monero prices that is long enough to stop sharp price moves to the upside or downside while still reacting fast enough to prevent large overpayment by buyers in a "bull market" and large underpayment for Monero companies in a "bear market".

As a recent example the 50 day moving average is currently $168.02USD while the recent high Monero price was $175USD. That is a 4.16% difference in average price vs high price. If many Monero companies and services followed the 50 day average as suggested then customers would choose to spend less often or sell their Monero for fiat until the price reached the average. A person who is not in Monero would want to wait to buy their Monero until the price reverted closer to the average.

During a "bear market" customers would be getting a "discount" since companies would be ~5% higher than the price of Monero. This would encourage spending and buying Monero until the prices returned to the average and the "discount" was gone.

Once the price closes and hardly deviates from the 50 day moving average the same cycle could be done again with the 100 day average instead. As this cycle repeats the volatility we currently experience would be a memory of the past and the major driver of price would be the devaluation of the fiat portion of the pair.

Edit: another benifit is that a price would remain unchanged for a whole day. No more 15 minute countdown timers before the rate changes

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[-] LobYonder@monero.town 5 points 11 months ago

If averages are published by a reputable website, shops can choose to use the average rather than "spot" price. In any case as XMR is more frequently exchanged for more stable goods or assets, the natural actions of buyers and seller will moderate fluctuations. However if you create a trading platform to trade averages vs spot prices that will tend to increase volatility, as short-term speculators benefit from volatility.

[-] shortwavesurfer@monero.town 3 points 11 months ago

I am talking about shops in this case. I was using Trading View to get the 50 day moving average and calculated based on that.

[-] VolunTerry@monero.town 2 points 11 months ago

I can get on board with this. Good post and thoughts.

I too use the appropriate label of shit for fiat. So love the fiat shitcoins label. A+ and an upvote for that alone in the post.

this post was submitted on 13 Dec 2023
11 points (100.0% liked)

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