Depends on which side you're on, what your timescale is, and a whole bunch of things. :)
STEEM has to be distributed for it ever to be valuable to enough people. That's one way to look at this, but unfortunately we're not seeing that same STEEM come back through the exchange to a Steemit account to power up... so yeah. Seems a bit out of balance right now.
This is exactly what I was referring to in my earlier comments on your posts in thinking about what it means when a net flow goes to exchanges. More coins are being held on exchanges not transferred back and powered up. For the most part this means, in the aggregate, more demand from speculators for short term holding. Given Steem system fundamentals this is a positive for SP holders (lower dilution). In time, powering up will become more attractive than powering down and a balance will be reached, but we aren't there yet.
I wonder though, why hold as STEEM on an exchange and suffer dilution instead of holding SBD in the platform gaining interest? Seems irrational to me, but maybe I'm missing something?
It's possible that some buyers are unaware of, or don't understand the dilutive nature of STEEM. Casual traders buy and sell tens of different coins depending on what they happen to read on bitcointalk, they just don't have time to learn about them
If you think you can make more trading the markets than you would lose through dilution then it makes sense.
If you have the resources and use bots it can be done (I think) but you would need the STEEM on the exchange due to the trading precision/timing that would be required. I have seen this kind of thing on many other altcoins before.
It is probably one of the main reason large amounts are held on exchanges and why so many people get caught out when there are hacks.
Due to the way these people make money it is not possible for them to proceed whilst keeping their funds locally or offline. They have to have them "live" on the exchange.
If you think you can make more trading the markets than you would lose through dilution
In a sense you have to be right. People are holding the coins on an exchange believing they can make more than enough from trading to offset the dilution. Whether that is correct or not maybe doesn't even matter. As long as people believe it there is demand to hold coins on an exchange. It will be interesting to see how long this trend continues.
Very good question! But we can't deny that people are doing it, and the quantity is increasing at a significant rate. Look at the Poloniex chart above. It hardly ever goes negative!
@thecryptofiend@smooth these are the reasons I bother to put this data together. Thanks fellas. Enjoying the conversation for sure.
Where will STEEM go? I don't know. One thing I do know is after three and a half years of bitcoin pureism, this is the first altcoin I've been really excited about. The world needs a decentralized social media platform built on blockchain technology which directly rewards authors and curators. Will it be Steemit? I hope so. If it is, I think there's a very real possibility the price of STEEM is currently undervalued.
How do you know that STEEM transfers aren't being converted to BTC or ETH?
My guess is that this is occurring quite a bit rather than users transferring STEEM onto exchanges and holding STEEM. This drives down the price of STEEM, and SP derives its value from STEEM. This negative is likely outweighing the positive of lower diltuion for SP holders.
There are still always buyers for the STEEM, who are apparently keeping it on the exchange in greater and greater quantity rather than transferring it to a Steem platform account and powering it up.
This analysis by @furion suggests that power ups have almost leveled with power downs. Next week either they will diverge again, or we'll see more balanced withdraws/deposits ratio
Depends on which side you're on, what your timescale is, and a whole bunch of things. :)
STEEM has to be distributed for it ever to be valuable to enough people. That's one way to look at this, but unfortunately we're not seeing that same STEEM come back through the exchange to a Steemit account to power up... so yeah. Seems a bit out of balance right now.
This is exactly what I was referring to in my earlier comments on your posts in thinking about what it means when a net flow goes to exchanges. More coins are being held on exchanges not transferred back and powered up. For the most part this means, in the aggregate, more demand from speculators for short term holding. Given Steem system fundamentals this is a positive for SP holders (lower dilution). In time, powering up will become more attractive than powering down and a balance will be reached, but we aren't there yet.
I wonder though, why hold as STEEM on an exchange and suffer dilution instead of holding SBD in the platform gaining interest? Seems irrational to me, but maybe I'm missing something?
It's possible that some buyers are unaware of, or don't understand the dilutive nature of STEEM. Casual traders buy and sell tens of different coins depending on what they happen to read on bitcointalk, they just don't have time to learn about them
@smooth and @lukestokes There is one potential reason.
If you think you can make more trading the markets than you would lose through dilution then it makes sense.
If you have the resources and use bots it can be done (I think) but you would need the STEEM on the exchange due to the trading precision/timing that would be required. I have seen this kind of thing on many other altcoins before.
It is probably one of the main reason large amounts are held on exchanges and why so many people get caught out when there are hacks.
Due to the way these people make money it is not possible for them to proceed whilst keeping their funds locally or offline. They have to have them "live" on the exchange.
@thecryptofiend.
In a sense you have to be right. People are holding the coins on an exchange believing they can make more than enough from trading to offset the dilution. Whether that is correct or not maybe doesn't even matter. As long as people believe it there is demand to hold coins on an exchange. It will be interesting to see how long this trend continues.
Very good question! But we can't deny that people are doing it, and the quantity is increasing at a significant rate. Look at the Poloniex chart above. It hardly ever goes negative!
@thecryptofiend @smooth these are the reasons I bother to put this data together. Thanks fellas. Enjoying the conversation for sure.
Where will STEEM go? I don't know. One thing I do know is after three and a half years of bitcoin pureism, this is the first altcoin I've been really excited about. The world needs a decentralized social media platform built on blockchain technology which directly rewards authors and curators. Will it be Steemit? I hope so. If it is, I think there's a very real possibility the price of STEEM is currently undervalued.
@smooth I think people's perception of their trading ability is often out of kilter with the reality!
How do you know that STEEM transfers aren't being converted to BTC or ETH?
My guess is that this is occurring quite a bit rather than users transferring STEEM onto exchanges and holding STEEM. This drives down the price of STEEM, and SP derives its value from STEEM. This negative is likely outweighing the positive of lower diltuion for SP holders.
There are still always buyers for the STEEM, who are apparently keeping it on the exchange in greater and greater quantity rather than transferring it to a Steem platform account and powering it up.
This analysis by @furion suggests that power ups have almost leveled with power downs. Next week either they will diverge again, or we'll see more balanced withdraws/deposits ratio