Volatility is Poison: Here’s Why I Am Celebrating the Low Steem Price and Hope it Stays Low (For a While)

Are You Crazy?

Pro Tip: People who aren’t “drinking the bitcoin kool-aid” think you are fucking crazy when you talk about cryptocurrency.

This is easy to underestimate. We spend a lot of time here on Steem talking with each other and nerding out on cryptocurrency. We don’t just discuss bitcoin - we discuss altcoins, Steem, curation markets, governance models, staking… it’s a whole thing.

When you spend weeks arguing about which method of blockchain governance is superior, you can easily forget that most of the world isn’t even convinced that bitcoin is real.

No matter how many times John McAfee claims he’s going to eat his own dick, the truth is that bitcoin and cryptocurrency are still early technologies with no guaranteed outcome. We could win big, we could lose big - or perhaps worst of all, we could plateau and simmer away over the decades.

_{Enjoy John’s antics - but don’t trust him!}

With all of that said, to be honest I’m happy that the steem price is back down to around $2.

Return to Sanity - Low Prices, Low Hype

The lower price presents a return to sanity following months of craziness. Those old prices, and the rapid growth that came just prior, were not sustainable.

When investors in your marketplace are measuring returns on a weekly basis, you should be worried. You are in a high risk market.

So when the All Time High for the Steem token is more than doubled in a few months… and the entire market lurches towards insane new highs… I don’t see it as a good thing in the long run. It’s extrmely dangerous.

Fast growth is as dangerous as fast decline.

_{Where in this chart were you “safe?”}

The danger is in the volatility. Volatility is the blood that draws the sharks to the water - the day traders who care not about the long term of Steem, but who only see the potential for short-term profit.

Worse yet, the volatility is like a zombie virus corrupting many young Steemians who turn towards day trading and vote buying, as opposed to content creation and community engagement, in an attempt to get ahead.

The rapid rise of price of a cryptocurrency represents getting rich quick. Hey, we all saw it: Ethereum made many new millionaires.

Why not Steem, some would ask. But — is that really our best bet? Does the Baysian analysis come back saying: “Your best bet is a wild swing for the fences?”

I doubt it? I believe the best bet is strong fundamentals.

Three Quick Fundamentals of Steem

Fundamental 1: Great content creators & promoters who are earning enough money to focus on their Steem blogs, who can spread the word beyond Steem and bring new consumer traffic to the platform.

Fundamental 2: Businesses who transact via Steem/SBD (SMTs will boost this)

Fundamental 3: Long-term investors (“HODLers”) who see Steem as a good 10+ year bet.

To be honest, I’m not sure what else we need. If we have a lot of activity in each of these three areas, we will probably win.

None of them requre a rapid growth of the Steem price — all of them in fact benefit best from the least possible volatility in the short term, combined with the most growth in the long term.

Everybody wins when Steem grows by 1000% — but if it happens with 10x more volatility, it is 10x less useful. The best case is a low-volatility, gentle, slow growth towards greatness.

Final Thoughts

We should do what we can as individuals to encourage strong fundamentals for the Steem blockchain. We should do it as consistently as possible, aiming to build a lifetime of contribution for Steem.

Those who give the most and seek the least immediate satisfaction will, in my humble opinion, become the biggest long-term winners of this platform.

And that’s why I am glad to see a lower and more sustainable Steem price. Here’s hoping for slow and steady growth over the years, perhaps landing at $10 in 2020 as some like to speculate.

What do you think about the Steem price right now?