Hey, Minnows & Dolphins - It's OK to Spend Your Steem When The Market Is Down!

When you rely on Steem to pay the bills, and the market goes down… what do you do?

There’s a chorus of posts across the site, pretty much every dolphin and whale in the whole blockchain is posting something like “Don’t Panic! Hold your Steem! Only a Fool Would Sell Right Now!!!”

What it Feels Like to Be a Minnow/Dolphin Right Now

Let’s use a hypothetical example: Michelle, average Steem user, usually cashes out about 50 steem each week as supplemental income. It goes towards groceries, credit card payments, gas in the tank. When Steem was way up at $2+, she was really having a good time. She had $100+ per week to spend, so she was able to not only buy essential groceries but also some fancy cheese.

Dank.

All of the sudden July comes around - Bitcoin hard fork drama happens, big whale stuff above her head. Ethereum is down, Bitcoin is down, most importanly STEEM IS DOWN!

Michelle really needs to cash out her 50 Steem this week. She’s running low on food, plus she told her friend they could go get coffee tomorrow and doesn’t want to risk having her card bounce… But she feels very guilty.

The whales keep saying DON’T SELL! DON’T SELL! - But how should she not sell? This is money she needs to survive.

It’s Ok to Spend for Survival

You should feel completely OK with spending Steem right now for survival purposes. If this is a useful extra source of income for you, then the ups and downs of the market are just part of the game. You don’t need to time it perfectly.

If you sell 50 Steem at $1.20 today, and tomorrow it’s at $1.40, you might feel like an idiot. “There goes 10 bucks!” - but here’s the thing: The mental stress of trying to time the market is NOT WORTH TEN BUCKS. Life goes on either way, you’ll just have less fancy cheese money for a little while.

_{Don’t try to predict the future.}

Also, the market is just as likely to go down in the short term. I was looking at $1.75 steems last week and waiting to cash out my weekly pay… I didn’t want to do it before $2. Well, look at me now, cashing out at $1.20. OOPS.

Don’t Confuse Steem Income With Day Trading Income

When you treat Steem as a regular income source by cashing out some of it each week, you are NOT DAY TRADING. You are earning money for writing.

If you choose to hold Steem as SP for long-term holdings, THAT IS NOT DAY TRADING. That is long-term investing, like buying mutual funds or bonds. You are betting on Steem’s value going to the moon in the future - whether or not Steem is worth $2 today has little bearing on its ability to reach $10 in a few years.

Day Trading is a very specific thing. It’s when you trade that money on a daily or even hourly basis, trying to time the market for profits. You only day trade with funds you are willing to lose.

You are either day trading or you are not. Decide ahead of time and stick to it. I personally do not day trade whatsoever. I cash out 50% of Steem earnings as income and 50% automatically vests into Steem Power, where I do my best to not touch it.

If I try to time my cashouts, I am day trading. I can’t afford to lose all of my Steem income without a significant reduction in life quality - therefore, I should not day trade with it. Does that logic make sense to you?

Summary of this part: IF YOU AREN’T DAY TRADING, NEVER TRY TO TIME THE MARKETS IN THE SHORT TERM. Either hold for the long-term or just cash out on a regular schedule.

What Do You Think?

I’m really curious to get feedback on this idea. If you spend Steem as part of your “survival” income, using it for groceries, rent, etc - how has the market downturn affected you? Do you think the ideas in this post are good, or do you disagree?

We’re all learning how to do this new blockchain lifestyle together. See you in the comments :-D

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