Bullish or bearish on STEEM?
I was asked a couple of weeks ago (by @infovore) to give a prediction for the price of Steem by the end of the year. The short answer was 25 cents. Now Steem is at 25-30 cents and price is the hot topic, I thought I’d give a brief insight into my current thinking and explore the 'bullish'/ 'bearish mentality that is pervasive in crypto.
Short term
My short term view on the Steem price goes something like this:
• There is a 70% probability of Steem going to 10 cents by the end of the year
• There is a 30% probability of Steem going to $2 dollars by the end of the year
Should I be bullish or bearish?
Longer term
In the long time the ‘price’ per Steem is less relevant. Particularly if you store your Steem in Steem Power as I do.
Steem’s current marketcap is just under $50m.
My longer term view would look something like this:
- There is a 70% probability that Steem’s marketcap will drop below $10m in the next 5 years.
- There is a 30% probability that Steem’s marketcap will rise above $1bn in the next 5 years
Again should I be bullish or bearish?
More speculation…
A further extension of my thinking…
If Steem hits a $1bn marketcap,
- There is a 70% probability that it doubles to $2bn
If Steem hits $10m marketcap
- There is a 30% probability that it halves again to $5m.
Should this change whether I’m bullish or bearish?
Randomness
In a timely coincidence, I’ve been listening to Fooled by Randomness by Nassim Taleb whilst I’ve been engrained in my new workout regime. I think the point he makes about marrying the probability of something happening (e.g. a high possibility that the price will go down) with the expected outcome (e.g. it won’t go down by much relative to how much it could potentially go up by) is a valid one.
The figures I’ve thrown up have been pure speculation and in many ways speculation is a fool’s game. I have no idea what Steem or any other market will do! However it's important for me to think beyond whether a market is ‘bullish’ or ‘bearish’, whether a coin is ‘dead’ or ‘going to the moon’ at a given moment, when deciding how to move in the crypto markets.
I subscribe to the view of buying good coins, with solid fundamentals, when there is blood on the floor. So I’m buying Steem. However that suits my current position. I have earned a lot of Steem through blogging and curation, i.e. without having to buy. I also have high tolerance to risk and lots of patience (being a former poker player). I have a couple of years’ experience in trading/ investing in cryptos so I’m as comfortable with the lay of the land as you reasonably can be!
I’ve only ever invested with money I can afford to lose and now I’m in a (fortunate) position where I’m re-investing crypto profits. I can afford to take the risk of losing a portion of my profits for the chance of life-changing returns. If it does all go to zero then no real harm done. However I totally understand those that want to bank whatever they can now in the storm of spiraling STEEM prices. Horses for courses as we say here in the UK!
"I’ve only ever invested with money I can afford to lose"
This is the investing tip that most investors miss, but good gamblers understand. Investing today is a gamble. Do we always BTFD?
I think the trend is in steem is positive (otherwise I wouldn't have joined today), and I think among cryptos it's a solid choice. I concur with your assessment that nobody knows what seem is going to do, because nobody knows what the 7 billion people on this planet are going to do.
Great analysis. thanks.
Buying The Dip is fine, unless/ until the coin doesn't recover or takes longer to recover than expected or dips futher. That's why I buy in with a view to buying more if it does dip again. And also being prepared to ride it out for a year to 18 months if needs be. Or even lose it. That's the game we're playing, in my view.
Another issue (particular to Steemit), is that people look at the Estimated Account Value in their wallet and think it means something. It means nothing as we can only withdraw 104th of it weekly.
You're right to say that STEEM is a solid choice among the current crop of cryptos. For its drawbacks, its very innovative and in Steemit it has a great means of on-boarding users who have no real interest in crypto. Making it undervalued relative to those currencies around it IMO.
My BTFD comment was tounge in cheek. That behavior can't/won't last forever. My poor attempt at on-line satire. I feel the same on riding this thing out. It doesn't seem like its going to die anytime soon, as long as the user-generated content continues to pour in...and improve. I think that's the case. I'm hoping they can implement some sort of video hosting, so we don't even need imbedded you-tube vids.
I'm still in steem infancy mode, so I don't even look at the wallet value yet. I'm here because I like the content on this social media site, more so relative to facebook/twitter/etc.. I plan on powering up a majority of my wallet from the way I read into how that works.
Also agree on the fact that steemit is innovative, and can on-board users without capital investment, and people who don't care about or understand crypto-currencies.
Great conversation. thanks
Can you do the same speculation for bitcoin?