20 Dollar per SBD: Comparing the volatility of Steem Dollar with other assets shows the growth potential
One week ago, I wrote an article in which I compared the volatility of crypto currencies with the one of classic assets to show how much potential for value gains cryptos still have. The article had the title "32k Dollar per coin: Comparing the volatility of cryptos with other assets shows their growth potential" and yes, the upper range is 32.000 US Dollar for Bitcoin and the lower end is at about 8.000 US Dollar.
In this article I will conduct the same analysis for Steem Dollar
What I did in the other article was to take the ten day average of the daily spread of several classic assets and crypto currencies. The result were two charts with the first one showing the comparative assets gold, US Dollar and and the TecDAX index and the second one shows the volatility of the two crypto currencies Bitcoin and Ethereum.
What happened in March 2017 that affected the Crypto market?
Both charts cover the past 500 days. A bit right to the middle, about 200 days back (March 2017) you can see that something happened. Before this mark, the volatility of the classic assets was high and both charts show the trend to go down. After the mark on the other hand the volatility of the classic assets stabilized on a low level while the volatility of the crypto currencies went straight up.
Impart this increase in volatility can be traced back to decisions made by the Chinese government (and others) as well as Jamie Dimons notorious statement about Bitcoin, but not all factors for this development are known.
What is known is the event that happened in March 2017. It was the Federal Reserve raising its interest rates. This not just indicates the role of crypto currencies on the market (a very dangerous if not "suicidal" one..), but it also also shows that the speculation with crypto currencies apparently follows the same rational decision making process as the speculation with classic assets and is not based on speculative impulses (it's just opposing assumptions that drive cryptos compared to classic assets).
Steem Dollar seems to follow the same pattern as other crypto currencies
Today, I got myself the available historic data for Steem Dollar and created the same chart with the average daily volatility of SBDs. I did delete the value for May 17th because it was strangely off. It's probably an input error - or if you know what that is, I'd appreciate a comment.
Anyway, here it is, the average Steem Dollar volatility of the past 15 months:
-> It's the exact same pattern
Beyond this Excel chart you don't need any other sophisticated tools to see that SBD is behaving in the exact same manner as the two big cryptos on the market. Obviously, Steem Dollar works and it too offers investors and speculators a place too where they can put their bets when the FED tries to put a halt to the game.
What levels can Steem Dollar still reach?
In the case of Bitcoin and Ethereum I concluded that based on the gap in volatility to the classic assets, their value will at double up and depending on the circumstances reach eight times the value they have right now as their volatility is about 100% to 700% higher.
In the case of Steem Dollar the volatility is about 300% to 2000% higher. This means that SBD (currently worth about 1 US Dollar) still have the potential to climb up to 4-20 Dollar.
As a Steemian I would say: That's good news!
Thank you for this information.
It has thaught me that volatility is used as a predictor of future value by economists which I did not know before.
Yes, it is an indicator showing where things might be going to. But of course it is nothing you should bet your savings on;-)
Obviously not,
I can get that cryptocurrency without buying, I bought others :D
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