Many are asking when the price of STEEM will take off?
There is a feeling it is undervalued compared to other currencies that are out there. I agree with this sentiment based upon what is taking place here. That said, markets do their own thing.
Of course, many feel the answer is marketing. Certainly, if we appealed to investors with a honed strategy, this would people buying the token. A marketing plan targeting buyers is not a bad idea if one is simply interested in getting the token to move up.
The challenge with this is if it becomes a dump. Move the token up 5x or 10x and we encounter selling pressure. Perhaps FOMO could take over and more buyers jump in but that would be the foolish money. This is how markets seem to work. The smart money gets in, the price starts moving, they bail leaving the "retail" money holding the bag.
This all could happen on its own. We have no idea what markets will do or when. A pump and dump can come from anywhere, especially with something that has suck a small market cap.
There is, however, another way to look at all of this. It entails understanding the genius behind Steem and how it applies to the token.
We all know that some Steem Power is required to be able to interact on the Steem blockchain. Steem Power equates to Resource Credits which enable activity. Hence, accounts need to have it, either owned or delegated.
This is vital to the mooning of STEEM. If one is able to understand this, the secret is revealed. Also, a determination can be made whether Steem will ever achieve this end.
Before going any further, there was talk of a Resource Credit pool where people can delegate their RC out. This does not change the equation at all since someone needs to be holding that SP. Whether it is an individual using it him or herself, or a larger account like an application delegating it out, the result is the same. In other words, the numbers do not change.
Let us suppose that an application like @actifit got 100,000 users. In an industry where there are tens of millions of Fitbits, this does not seem too outrageous. We also will utilize Steemit Inc's delegate of 15 SP per account. This is actually a bare minimum for one to reasonably interact. In truth, as it stands now, 50 SP is necessary.
Anyway, at 15 SP, there would need to be 1.5M SP for 100,000 users to interact on the blockchain. This would give them a post with a few comments each day.
I think it safe to say that 1.5M SP being locked up is not going to do much to the price of STEEM. However, this is a bare minimum. It stands to reason that many of these individuals will not be satisfied with just having that. A certain percentage will be like the rest of us, wanting to see their accounts increase.
At the same time, this is one application.
What if we had another 100,000 users who liked @3speak. They are into posting videos and commenting on what they see there. Of course, on that application, one can do it without a Steem account. That said, through the effort of individuals, the possibility to convert what is done into a Steem account is a pathway they are offering.
What this means is the SP is being generated through the payouts, it is simply held in a 3Speak account until the user claims it. Hence, we see it locked up so that people can operate.
Here again, another 100,000 users with 15 SP is another 1.5M. On its own, it is not much but coupled with Actifit, now we are getting somewhere. The two are 3M SP, or roughly 1% of all the STEEM out there.
We can keep carrying this out to different applications. Find 10 applications with 100,000 users, and we have 1M users with 15M SP.
Nothing operates in a linear fashion so we are aware that some applications might have more than 100K users while others less. What is an app like 3Speak got 1M users. That would necessitate the tying up of a lot of SP.
My point is that the price of STEEM will moon simply because of the way the system is set up. The question is will Steem ever get the number of users to make this possible? That is what each person needs to decide if he or she is going to invest in STEEM.
Certainly, amassing users is a much slower approach. The numbers show that it will take a lot more 15 SP accounts to equate to one investor plopping down $100K to buy STEEM. At the pace we are going, it could take years to reach these numbers since we are holding at 40K daily transacting accounts (probably less than half that number if we are counting individuals).
Nevertheless, this is why I am taking a long-term view of Steem. In the end, I do believe we will achieve millions of users on this blockchain. That is going to require tens of millions of STEEM to be powered up beyond what it is today. When that happens, there will be enormous buying pressure on STEEM. Either individuals will realize they need it, applications power up so their users operate, or investors see a path to a rather rapid return. Regardless of where it comes from, the upward push will be there.
This is also a situation where there will not be a dump. While some users might leave, if an application is something they are enjoying, most will keep using it. Their accounts will most likely keep growing simply through activity meaning they start to tie up more SP.
And so the snowball continues.
As an aside, I do believe we will see some type of Resource Credit pool at some point. For this reason, it is sensible to keep amassing SP is you can. Anyone who has more than 100 SP will probably be able to do all they want on the blockchain without running out. That means even an account of a couple hundred SP will be able to put the RC to work.
Ultimately, the way Steem is designed forces users to hold SP. That means someone is going to have to buy STEEM at some point and power it up. Who will do that and when is unknown. However, there will come a time when applications and individual users need that SP.
And that is when STEEM will moon.
Until then, I am going to keep amassing it myself.
If you found this article informative, please give an upvote and resteem.