For the last few weeks I have been telling myself that the price of Steem and the current downtrend is completely irrational. My problem was that I was trying to analyze Steem's price like I do with other cryptos: looking at total coins in circulation and the amount of users and interest around the coin.
For instance, imagine there was 4,000 daily active users on Litecoin's subreddit and forums, lots of posts and projects around it like steem has and only 10 million coins in circulation, for me that would be a very strong BUY signal.
The big difference is that Litecoin users are also investors, if you go to litecoin's social sites and publish you are probably a holder of LTC, but in steem most users are not Investors, instead of buyers and holders, they are mostly sellers.
Yes, people blog, publish amazing pictures and sell the Steem and SBD they receive for it. This is why the price is falling, there is more sell pressure than demand. But why do people sell?... its simple:
We are so used to giving out our content for free that when we get paid for it we do not value it.
So there is a big psychological aspect that is driving steemit users to sell their gains, but how about speculators and traders?... maybe they can pump steemit, right?...
WRONG again, traders know for sure which accounts are powering down and transferring funds to exchanges, there is nothing hidden on the blockchain and most large accounts are selling, if you are a smart trader what do you do? you short! short! short!, in fact traders love an easy short like steem, if you sold at $4 and $3 you could have bought back all your steem (and Vest) for a much lower price now and nothing is better than making profit without actually reducing your initial investment.
So what can we expect for the future?
Like @dantheman has said in the some of his posts, no asset goes to $0 and I am sure Steem won't be the first. You don't believe me?.. go to poloniex and checkout the highest volume coin today .....ok I will tell you, is POTCOIN!!
So we know Steem will always be worth something, but what would it be?... well I can't answer that, but you can ask yourself these 2 questions:
- At what price would you stop selling?
- At what price would you consider buying?
The accumulation of those answers may give us a hint of where we are heading. In my case I already stopped selling and I even powered up today a little today, as for buying I am ready to throw in a few BTC if I see the price go near or below the $0.25 line.
How about you, ready to stop selling and do some buying?
I guess I'm too conservative in that I haven't been buying or selling. I should have been doing something like accumulating SBD, I guess, but I only started doing that recently. Beyond that, I've just been posting, commenting, and voting. I put my initial investment in and now I'm just letting that ride to see where it lands.
I do like how you simplified it though. What price would you buy at? What price would you sell at? Answer those questions for enough people and you have the price of STEEM.
Edit: I directly asked @dantheman and @ned about what's being called "dumping" in the latest exchange transfer report. I hope they answer.
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What is the benefit of holding SBD over liquid Steem ?
If someone was to buy US$ 500 of Steemit, which is the best to buy ? liquid Steem or Steem dollars SBD ?
Do you recommend people keep like certain percentages between Stm, SP and SBD ?
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Don't take my advice. The only approach I've found that somewhat works is... to keep trying different approaches. Figure out what works for you. That said, I'll try to answer your questions as factually as I can, but again, I'm probably wrong.
SBD: is meant to be a pegged asset to USD. If the price of STEEM is falling (as it has been) putting your value in an asset that is not falling in value makes obvious sense. It also gives 10% annual returns as interest.
What is your investment horizon? I can't answer for "someone" but I will answer for me. My financial investments went right into Steem Power. That's vested STEEM which can't be withdrawn without powering down which gives 104 distributions over two years. The reason Steem Power is valuable is complicated, but it has to do with the curation rewards you can achieve by them, the "influence" you can have on the social conversation by voting up posts and comments you value, and the protection against share dilution you get which relates to the conversion of VESTS to STEEM. It's unfortunately quite complicated, but then again so is your car and you still use it all the time. I've read the white paper twice and I've played around with code directly analyzing the blockchain to figure this stuff out. I've also asked a lot of questions and made a fair number of mistakes both here and in the steem.chat. Ultimately, you have to figure out what works for you and being willing to make some mistakes and learn from them.
Good luck.
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It's been an off couple of weeks for me - too much month and not enough money. Sadly, this has really made me sell when I wanted to hold or even buy. I need to get the house square before I can truly call myself an investor, but I'm here for the long haul, even if my only contribution is what I create and share...and doing my part to recruit new people to the site.
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0.25c is the last big resistance level.
if price passes this level anything between 0-10 cents can happen.
this could bring on bigger Steempower stake distribution ! -> price will continue to rise.
buy the dips
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also STEEM has many users new to crypto - for them its odd to hold something so they sell right away - even on bad % spreads
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Yes, this too!
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I basically just got here and I'm buying.
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I'm not selling.
I got in for free.
I've made (some) money.
I've powering up everything.
I can't lose.
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What i love is that unlike the traditional stock market , if you buy $500 of Amazon that is what you have. If you buy 500 Steem your own work (value $250) adds to that. So just by using the platform your 500 dollar buyin is less risky since your own actions buffer and dilute your capital risk of the 500 dollars . . .
Thus if your steem value lowers well you have artificially inflated the amount you can afford to risk because your gambling with 750 dollars and not just like the pure 500 your purchased like as if it was traditional stock market shares . . .
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Exactly right.
I wish more people would realize that, quit their whining about how unfair it all is, and knuckle down, buckle down, and just DO IT, DO IT , DO IT !!!
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I've never sold a STEEM coin in my life. Silly me! I'll be a buyer once the trend clearly reverses.
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Exactly. I expressed this to smooth, but added that those of us doing this likely represented a large portion of the people buying; agreeing with smooth's assessment that "there are no new investors".
The price is much lower since that discussion, and I expect/hope (or as smooth said, we're all doomed) we will see some new investors coming aboard soon, instead of mostly "true believers" re-buying lower.
I'm not calling bottom, but I think we're getting close enough that we will see some big buys start showing up fueling some mini-pumps before something else really "pumpable" comes along from the ecosystem.
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Thanks Chitty for this nice little post :)
I dont sell at all, if the price is near to 10 cents i will buy....
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why not to go 0.00001000 BTC I think it's fair, only to see it did not have a good future for a social media :)
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So what if you have ten people all holding a lot of steem . . .
Now that is ten people, so let us say those people think if we sell off a lot of steem well will share that risk with one thousand people . . .
What if those 990 who buy in want to protect their investment, no matter what they paid for it?
Now you have not ten people who are financially motivated but now you have 1,000 people working for the platform.
If those people work is added to your own work then everyone's value of Steem increases . . .
Thus you get more people financially involved in the platform rather than just pure users . . .
The beauty of this principle is that if the bottom keeps falling you do not end up owning 100% of worthless nothing because you have sold some off already, this protects your risk.
Another benefit of selling steem is the buyers end up purely speculators who do nothing with that steem except trade it around or you turn HUGE Whales with massive voting power into large whales with lots of voting power, but now you have other steemians with serious voting power to faster redistribute the newly mined steem around and across the Steemit platform . . .
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I will resume buy again when steem has a value in the "real world", i.e. when steem begins to be used for real transactions and not only distributed in the "fantasy world" of Steemit. Right now is too early to analize the results of this experiment, because part "B" of the experiment must be executed: steem should go out to colonize the world like any other cryptocurrency does...
I do feel in the steemit community some kind of dislike for the investors and an excesive valoration for the "steem" gained only through posting. Investors that do not post will be the first signal that steem is gaining traction.
But, to see investors in Steemit should there be something more than a simple strategy to take advantage of trading with other cryptocurrency. Steem must be useful in some niches and of course must have a private wallet where only the owner knows how much "steem" have.
IMHO the biggest disadvantage of steemit is the absence of privacy. Do you imagine how many people are interested in buying services or things that the entire world would know all the time for decades?
I have mentioned it many times in my comments: is kind of stupidity verify accounts and associate it with real people's name. We are dealing with a new technology application: mixing blockchain with human nature (social network). Please, think about all possible consequences, even the legal ones. Everything is being written almost literally in stone. Again IMHO, verification will be the feature that will put in danger the future of this great idea.
We are going to be just simple "bagholders" if the steem is only valuable in the steemit community (the circle jerk). Imagine the possibilities, if the big holders of steem could sell their "steem" to many people privately. We need private wallet outside of Steemit to balance the value of the steem in the real world.
The social network is growing a great steps but the "steem" is loosing value because content value in steemit is not related in any form with value in the real world. For me, the "steem" is still overvalued because you are not making any real effort to win money in this platform. You could post crappy content and receive votes, even with spam. Or even better do nothing and win "money"...
The falling price of steem is a good indication that the market is working as it should. Perhaps millions of accounts with the same small effort would have a better price performance for the steem.
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It painful to hear. Let's hope you will wrong.
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You have apparently glossed over that many in the market view Steem as insta-mined. Whether or not it's a fair assertion it's yet to be seen if the small number of holders of ~80% of Steem will adequately distribute their holdings to the wider community.
It's my assertion that a similar beginning has dogged NXT in the market. That currency built from the ground up wasn't a mere fork of anything before it. It has decentralized exchange and powerful technology under the hood. However, it hasn't been a market darling because the entirety of tokens to be issued were essentially "gifted" to 20 or so early adopters who have been in charge of spreading the token around. That and it's proof-of-stake bringing up some additional security baggage and favoring the original whales who potentially earn more than everybody else.
So I see Steem has had something of a similar beginning favoring a few whales intent, possibly, to do good for the mass adopters. It's too early to say if they will successfully carry through, and even if they do the early perception of unfair distribution could dog this platform forever.
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Questions, how exactly does one short sell Steem, or any crypto-currency for that matter?
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Go on poloniex on margin trading tab. Put in some bitcoin that u can leverage 2.5x, see when the crypto is on top, click sell and that is it.
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From my understanding... I don't think Steem can be sold short?!
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You can sell and buy back cheaper... at the moment there are no exchanges than lend you money to short but you could of course lend some steem from other users, I actually remember one member of the community asking for steem and he promised to paid back at a high APR... very clever actually.
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Some fantastic insight on the psychology of market value man! Great Post:)
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This may make me part of the problem, but I'm just not confident enough in the longevity of the platform to start buying, no matter how low it goes. I love Steemit and I want it to succeed but this downward trend has been going on since I got here. I'm not convinced that it will break. I'm not convinced that such an investment will be worthwhile.
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