The Flying Pig have landed… Time to stack up them Steem Dollars?
Follow that pig!
I think I was watching a Tai Zen video when said words to the effect of, 'if you see pigs flying in the cryptocurrency market, don't stand around questioning it, go with it.' For the last few months we’ve enjoyed a substantial mark-up on the Steem Dollar. I never thought I'd see such a premium on a pegged cryptocurrency. However I haven't been spending too much time wondering what the hell is going on. I've been taking Tai Zen's advice and going with it.
Turkeys do vote for christmas sometimes…
I’ve been fortunate enough to earn a decent amount of Steem Dollars through posting here on Steemit recently. On one hand the recent Steem Dollars price has suited me. I sell the Steem Dollars I earn on the open market for a fantastic premium.
I’m no sage however I’m confident that a Steem Dollars (SBD) should be worth around one dollar (USD). Maybe +- 20% (maximum) depending on the climate. . So when I see 50% - 2000% markups on SBD, I’m going to sell.
However I am mindful that someone will likely be holding the bag when SBD corrects and gets back on it's peg. I'm a long term holder of Steem and I don’t think it’s healthy for the Steem eco-system to have people getting burned by buying over-valued SBD. SBD wasn't designed as a vehicle to be speculated on as it's value is intended to be fixed.
So I’ve tried plenty of times in comments and posts to explain the nonsense of paying so much SBD, eventhough doing so is against my short term interest.
Hedge
Selling my Steem Dollars has had one downside. I think it's important in a bull market (like the one we're currently enjoying in crypto), to hedge against a downturn. I've always seen SBD as a fantastic tool to potentially hedge with. Being pegged to the dollar it allows me to retain a dollar of value without having to cash out into fiat.
Profit over security
However the temptation of the premium has proven too much to resist. So it has meant me having to hold my ‘hedge’ in actual fiat. Either on an Exchange or cashed out to my bank account. I really don’t like converting to fiat unless I need the money. Also we all (should) know the dangers of holding anything on an Exchange. So profit has come at a price albeit a small one.
Returning to an Steem Dollar norm
Over the last couple of days SBD has been returning to its dollar peg. I can now look to holding Steem Dollars again. I like the idea of holding dollar equivalents in a crypto wallet. Steem Dollars really works for me because I trust the wallet (with its added security of the 'Savings' waiting period). Also there is the prospect of interest earnings returning.
Perfect timing
If crypto goes into a downturn, I suspect traders may treat SBD like ‘just another crypto’ (as they did in the bull-market). This might mean SBD gets dumped substantially below its dollar peg. If this happens buyers could pick up a massively discounted SBD. As an added bonus, a discounted SBD could increase the likelihood of interest being offered to SBD holders (as an incentive to buy and maintain the peg).
Provided the Steem market is liquid and the network healthy, SBD is beginning to look attractive again. In an overheated crypto-market, it may prove the perfect safe haven during any downturn. I'll certainly be keeping an eye out and looking to pick up some SBD on the cheap!
Really good post. I've been looking at SBD in a similar fashion. With the initial understanding that a SBD was supposed to be equal to $1 US Dollar, I've found the inflated price of SBDs a great opportunity to increase my Steem holdings. No reason to hold when you're getting near double it's understood value to sell and acquire more assets. The incredible premiums we have enjoyed with SBDs I've seem as SBDs trading as it's own separate entity, it's own form of currency as you stated, which is odd, but hey, I never look a gift horse in the mouth.
I think you nailed it when it comes to SBDs being a great hedge on multiple fronts. They could be a great hedge if interest earnings would return. In the event of a major downturn, which would more than likely force their traded price under a $1 (if they keep trading the way they have been), this would be a great opportunity to acquire SBDs at incredible value, under it's implied valuation of $1. All in all, I see SBDs as a great way to acquire more Steem Power, which is where I want to be as I'm looking to hold long term. They've proven to be incredibly profitable so far and I believe will continue to be so for the shrewd minded trader.
I am all for the concept of "going with it" instead of questioning it. This includes people worrying about others' success. Just get on this train while you can and go with it to get some profits. And it would be great to get some SBD at a discounted price, but then again downturns are scary. But, I just think it's the nature of the business. Crypto is definitely here to stay. It's just going through some growing pains.
@nanzo-scoop Have you ever considered exchanging some of your FIAT money for physical silver or gold bullion that you store in your own safe, at home? To me, that is the ULTIMATE form of financial security. (Keep in mind, I am NOT a bullion dealer - so I'm not trying to sell anyone anything here.)
My strategy is to put some money into physical bullion, which provides the financial security that I want for my family, if SHTF and/or/when the U.S. Dollar fails. ALSO, I'm getting into cryptos. This seems to be where the best short-term profits can be made, in a more financially secure way than investing in the stock markets or bonds. THEN, I take the profits from cryptos, and buy some more bullion. This way, I have both "financial security" and I can have my money working for me, building profits, in a good way with cryptos.
Here is the added benefit: everyone who "pumps" silver and gold, with their pressured speech & heavy breathing - these guys, eventually, are going to be right - one time - WHEN the dollar finally does fail. At that point, bullion will get this "moonshot" they are all hyping. In order to really profit from this, you will already have to have your physical bullion in your possession - not a bank, or a depository - it must be in your home safe, or wherever you stashed it. Then, it is yours - nobody can take it away from you or prevent you from digging it up. This wealth-transfer event will be life-changing for anyone who has $10,000 or $20,000+ in bullion.
I like cryptos. I REALLY like cryptos for the shorter-term profits that are being made with them. The only drawback I see is this: everyone assumes that the internet will continue to go on in the future, just like it always has. This is a mistake. An EMP in the right place, a virus, a power-grid failure, a change in laws, WW3 - all of these things could wreak total havoc on what we call the "internet" today. The internet of tomorrow might not be the same.
So, my strategy is to BOTH stack silver & play in the crypto markets. That way I am both SAVING money for my own financial security, and making good PROFITS with my crypto investments.
What say you?
I understand having gold and sliver in your home. I am not that comfortable with having a lot of it. Where I live if you need $$ they don't want to buy it. If they find out you have it they will want it the crooks You know the state those fools. If I have to move out of the country they will steal it. They tried to steal it when I moved to Costa Rica. I only had a few stacks. So if the dollar goes will you sell your gold for crypto?
I will not move out of my bullion until the new World Reserve Currency goes from the Petro-Dollar and switches into whatever is going to come next. Right now, it's hard to predict exactly what that will be, or when that will be. However, I am feeling pretty confident that it's going to happen in my lifetime.
During the transition, at some point, moving from bullion into the next established currency - at the right time - is going to be a real KEY to taking a good profit. It's very possible that the next World Reserve Currency could be based either completely, or partially, on a blockchain currency. Who knows? I wouldn't be surprised by that.
Precious metals interest me but to be honest I do not understand enough to invest in it. I understand the value humans have placed in these things in the past, however I'm unsure how much they will still value precious metals in the future. Precious metals do have the advantage of having stood the test of time.
Silver interests me and I may take a position in it. I'm not sure whether holding bullion in my house increases my security or makes my family more vulnerable to physical threats. However definitely worth considering.
I think all bets are off should a black swan event take out the internet or major power supplies.
It's actually pretty simple - much, much easier than dealing in cryptos. Do not go for the "collectible" coins or numismatic value- buy simple, plain bullion for its' weight. Having a few gold or silver rounds on hand will give you immediate, portable wealth in the thousands of dollars. 10 gold rounds will get you out of many problems when the need for money, bribery, and/or bartering arise - and 10 oz. would be pretty easy to conceal. Honestly, you could go out and bury it if you're worried about theft. And, obviously, you don't broadcast what you are up to, to your "friends" and neighbors, and even some family.
Silver, however, is actually a MUCH more rare element than gold. It is being used up by the tech. industry at a faster rate than they are mining it out of the ground - so there will come a shortage. Silver is used in scores of products: cell phones, automobile windows, circuit board & chip manufacturing, solar-panels, water filtering, medicine, and many more practical uses. These products are the more "hi-tech" uses of it, but there are many others.
The element of silver just has some very unique molecular properties that are unique to it - it can do things that gold, and other metals, just can't do. It might not even be out of the picture to see silver approching, or even surpassing, the value of gold in the future - and right now you can buy about 70 oz. of silver for the same amount as 1 oz. of gold. Ponder that situation, for just a little while...
It might take 5, 10, maybe 15 years - but the day that silver gets this "moonshot" it's promoters are talking about, you're talking about taking profits like a Central Banker: obscene profits. It's not a bad idea to invest a few hundred or thousand in it now - it is, quite literally, dirt cheap. Just one more basket of potential eggs that will someday hatch. I'm sure I will take nice profits in my lifetime.
What I find especially interesting is that there are a couple of cryptos out there which have thier value tied directly to physical bullion - so, the idea is that you can "email" your bullion to yourself, as you move around the world. I have to look at this one closer, but The Dollar Vigilante seems enthused about it - so there's probably something to it.
This is a great perspective and well thought out strategy. I am only at the point now that I am learning about what I should do with my SBD now that I am collecting some. Your advice couldn't of come at a better time. Your blogs are all over the place but still all have valuable insight to whatever you are talking about. You seem like a really cool person and I really appreciate the support on my posts. It really means a lot. Thank you.
good post, thanks for sharing
Hahaha Lol!
So glad I joined Steemit. I never seen such a fun and easy way to make so much Money!
lol
But to flourish in Steem : click on my name and upvote me in my every post and I will upvote your every post,so mutually both will be benefitted and follow. This is the way of prosperity here. Thanks in advance.
you sell when you need money ..otherwise why not wait and grow it...
Looking at the internal market, 1 steem is worth in SBD the same amount that its worth in USD. Never seen that happen since i joined.