I don’t agree on the first part, but there is truth to the second. To prove the point - if every single STEEM token except for around 1,000 tokens were “locked up” it is very likely that the price of STEEM (given no changes in demand) would go way up.
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Well reducing the supply does limit the amount of walls above, but it (imo) also reduces the demand because who would want to engage in a trade with massive slippage because no liquidity? :)
A healthy market is a liquid market, with volume.
And lets assume your hypothetical everything bar 1000 tokens are tied up, and the price also jumps incredibly high, would there be investor confidence to maintain those levels when a single entity could come along and crush the market by flooding it with tokens?
Markets react to diverse forces, and not all of them are in your point. But thanks for the reply!
Tokens are divisible. There could still be (but we can't know in a vacuum whether there necessarily would be) plenty of liquidity in 0.001 STEEM units.
Perhaps the liquidity would be there, but remember the supply external to this hypothetical (every token locked up) exchange. :)
Hmm, I actually misread this and thought your reply was to a different comment.
I would agree with you to an extent, but it depends on how and why the tokens are locked up. If investors believe they will remain locked for along time (even if not guaranteed) that is quite different from believing they will come on to the market tomorrow.
No problem, and yes. 100% agreed there. But that was not stipulated in the hypothetical presented by Tim. :)