Dafuq? Why are people paying $1.25 to $1.35 on Poloniex for Steem Dollars?
Am I missing something or isn't #Steem Dollars supposed to be pegged to the US Dollar?
If this is the case why are people out there paying $1.25 - $1.35?
Here are my trades.
That was my first time extracting some #Steem Dollars out and the #Poloniex market just opened up today. I transferred $209 worth of #Steem Dollars and ended up with $259 worth of Bitcoin.
The cat is out of the bag on this one I guess. Is it time to pounce on this opportunity?
Because ... FOMO. I think they're afraid they'll be $100 tomorrow. :)
It still doesn't make sense to me though. I could see the price of #Steem shooting up fast but Steem Dollars are supposed to be pegged to $1.00 US Dollar. So if the system is working they shouldn't spend over $1.00 on each one. I almost think a bunch of people are confused about the difference between Steem and Steem Dollars. They probably got on CoinMarketCap and saw it way up and got excited and were actually buying the wrong thing. LOL
A lot of people have no idea what they're putting their money into. They see a price move and they buy having no idea what they're buying. These are the bagholders in life.
YES THIS...
That is what I'm thinking as well. They are confused. lol
Just sold 800 SBD for $1100 :-D
CG
SWEEEETTTTT! Were you surprised as well that people are paying more than $1 / Steem Dollar?
Steem Dollars can be looked at as analogous to Bonds in the, legacy, financial system - and I think that the same financial rules apply.
With the current economic climate the interest rates on Bonds is negligable or negative in some cases - they are seen as safe investments because you get the principle payment back at the end of the term.
The price of Bonds varies depending on the interest rate - a Bond with a principle value of $100 but offering a coupon rate of 5% will be worth more than $100 on the open market when the central bank has set the interest rate of < 5% - this is because it is very unlikely that you will find another safe investment that will return $5 for every $100 dolars in this scenario.
My understanding is that the 'coupon rate' on Steem Dollars is 10%, so this makes them a lot more lucrative than what is currently available in the traditional financial system.
I hear what you are saying about the 10% interest rate on Steem Dollars but then why would anyone even pay $1.10 for them if they would be basically washing out the $0.10 of interest / coin for an entire year?
Most people are looking at it from 1 of 2 ways...
Either they have no clue what it is and that it will maintain a peg in dollars.
Or they are looking at it as a hedge play, a way to have a lot of cheap steem if the steem price drops significantly.
In otherwords they think there is a strong possibility of precipitous drop in steem & BTC and they need a place to park some liquidity while the near term future plays itself out, but long term they are long on steem.
Polo traders aren't a dumb bunch. The truly bad traders don't stick around long. When I was in there Steem Dollars were being discussed as a good hedge against general capital outflight from crypto in general. But the order books can get thin and while you can't exactly do a market order, you can tell the system "trade this much BTC for SBD" and most of the bots out there won't bat an eye at clearing the whole order book. Some of the people won't either.
Interesting insight and I think it is odd that NuBits has had a hard time lately staying pegged to the US Dollar. It is trading around $0.86. For the longest time it was real stable around $1. I wonder what is going wrong with that system and how closely that system works to the way Steem Dollars pegs to the US Dollar?
https://steemit.com/steem/@jl777/sbd-at-0025-btc-how-is-this-making-any-sense-i-explain-what-happened-with-the-pricings-today
Ok, that makes a lot more sense. Still very technical and a traders view point. I haven't really utilized the internal market yet so I'm still feeling my way around. I guess for me selling the Steem Dollars I was happy because I was under the impression that I had $209 and suddenly I was able to get $259 for it but it seemed odd to me. Thanks again for the explanation! I knew someone knew the answer!
it fooled me at first too, but I got suspicious when the premium lasted for so long and in spite of people knowing the details. then I saw the internal market collapsed from $3.50 to $2.50
u must have something udnerstood wrong because steem and steem dollars are traded on exchanges so its not possible for steem dollar to be pegged to US$
It is certainly possible, and there are other cryptos that are pegged to the dollar, such as NuBits.
Totally, if Steem dollars are pegged to USD, why trade them anyway ??? The prices go up and down with the market
Yeah that is what I was wondering. I was confused why a market was added for Steem Dollars / BTC. I thought Steem Dollars was just mainly used internally in Steemit. I'm not sure why people are buying Steem Dollars on the exchange.
That's the "supply and demand" principle at work, Buyer wants steem dollars, seller has steem dollars, seller sets price they want, buyer pays or makes counter offer.