Down from the highs

When I joined Steem I had almost zero previous experience with any kind of financial investing, and zero with crypto. One side of that has changed somewhat, but I am not sure how much it has changed. I do think I know a lot more than I did, but at the very least, I do now own a fair bit more crypto than the zero I had coming onto the platform.

It could be said that in comparison to traditional stock markets, crypto is "pretty volatile" and while two years of bear markets might seem an eternity and forced many into capitulation of the industry, it is good to remember just how volatile it all can be.

The All Time High (ATH) of Steem was on January 3rd and was around $8.30 US - it seems soooo long ago. Meh. However, it is often quoted as showing how far Steem has fallen and reason to be depressed and leave. What people might not remember so well however is how quickly things moved.

For example, when I arrived on Steem at the end of January the price was about 15 cents (I didn't know at the time) and 6 weeks later it had lost 50% of its value to bottom at about 7 cents. I would have been pissed if I had bought... But, by the end of May it had climbed back 300% to be around 22 cents. Even if I had bought at "the high" when joining, I would have been up about 50% in 3 months.

Not bad! Sell, sell, sell!

6 weeks past that however, it had climbed up 1000% on top to sit at around $2,40. 4.5 months to climb +3400%

Here is the chart from 2017 and a little of 2018 to show the ATH.

As you can see, the climb toward the ATH was 30% faster, with it moving from around $1 to $8 dollars in 4 weeks - an improvement of 800%.

Not bad! Sell, sell, sell!

I didn't... I have held all the way down. Silly perhaps, but at the same time there aren't too many people out there who currently have more Steem than I - and I welcome them to buy some now that prices are at February 2017 levels.

Just think, in those nine months from low to high, the price of STEEM climbed about 11400% or 114x if that is easier to visualize. But, most of that climb was made in a very narrow band, while the rest of the year was essentially sliding down from the highs. It was a 6 month slide from 2.40 to ~1 before a 4 week the climb to the ATH and as we are likely aware, it has been a pretty consistent 2 year slide from the highs down again. What I think is interesting to note between the two peaks is the difference in volume, with there being a massive amount more traded at the highs, with most of it being traded after the highs, as people tried to take advantage of the volatility with their gains.

Just imagine if the "real" stock market was this volatile. Would you jump in with your life savings or your retirement fund?

It is hard to imagine what that might look like tbh, I don't know if ordinary people would dip a toe, nor do I think that governments would allow that much risk exposure for funds. At some point, the volatility has to end in order for real trading mass adoption to take place, but in order for that to happen, the same thing has to happen as in the real stock market -businesses with products need to emerge.

The reason that the stock market is far less volatile is that there are products and services that have demand behind them, regardless of whether the market price of the stocks alter. People don't suddenly stop buying phones if Apple stock reduces 10%, or Jeans if Levis do - end consumers are largely unaware of the stock situation of pretty much anything they buy. When you buy bread or milk, do you know what the trading situation of the production companies are?

A lot of the crypto projects are essentially speculative only, meaning they are driven by buying and selling for profit and loss without consideration of what they produce, which is mostly nothing. STEEM is hopefully heading in a direction away from this by creating products and services that consumers can use without needing to worry about the price of STEEM or various other tokens on the platform.

Of course for some experiences, some may have to be bought, much like a Netflix subscription gets paid for, however for the majority of future users, it could be that many will never directly enter into the trading scene and instead choose to remain consumers. This brings increasing stability as regardless of what is happening in the markets, end users will form the bottom as they will keep consuming.

At the moment however, we are largely traders or at least, like to keep one eye on price as we have been immersed into a platform that currently spends a lot of time on the economics. This is also great as the more educated and comfortable people are, the greater the chance of stable investors also, rather than those who pump and dump at any opportunity.

Stability takes time to form and in a young and dynamic industries like crypto and blockchain, being accepting of uncertainty is critical for most to survive. I wonder though, if Steem sees periods of growth as it has in the past where in 4 or 6 weeks there are massive gains, how many will sell, how many sell too early, how many hold too long, how many sell and on the long slope down, never have the confidence again to buy?

Whatever happens, price in one way or another is one of the largest disruptors to the community demographics and for the most part from my own observations, those who have been buying in more heavily are those who are looking longer and seeing more than price, but the potential for products and service. In other words, those who will bring the future stability.

Taraz
[ a Steem original ]