Why is the STEEM price cratering?
That's simple. Every 48 hours STEEM adds around a million new coins to the total supply. Sometimes a bit more and sometimes a bit less. Either way it adds up to inflation.
Secondly, there is no demand on the open market for STEEM. The daily trading volume is extremely low averaging around $200 k per day. That is really low for a coin with a market cap over $100 million. Litecoin, a currency of similar market cap, sees an average daily trading volume of 1-3 million.
Sure, you could argue that we are still in beta and we need to wait and see what happens. I've made that argument in the past. I've also pointed out that we are on the tail end of a massive pump and the market is correcting.
One thing is clear, as long as the coin supply continues to grow at such an alarming rate, user sign up remains flat and trading volume is non-existent, we will continue to see a loss in value. I'm still excited to see where this platform goes, it is some of the most fun I've ever had on social media but we need to come back down to earth and evaluate the situation.
Share your thoughts. Leave a comment.
I'm brand new to this, so my opinion is rather uninformed, sorry. But....
So far, being on here has been a learning and fun experience, hopefully by thoughts aren't covered elsewhere (like the white paper- still need to read that) ;-)
I agree with you. I had heard about Steemit from a friend who actually didn't want to share it but needed help with maintaining a FB group to keep them active. LOL Funny how that worked out 'cause here I am and I'm really loving the platform.
I have read the white papers and it's really exciting to see how the developers have thought about sustainability - but as markets go, there is going to be corrections to the value based on supply and demand. Personally, I'm hoping that it rebounds a bit because my intent it to buy STEEM and sit on it as an investment. Just imagine if you'd bought stock in Coca Cola or IBM when they were virtually nobodies? Ah, one can dream.
Welcome to Steemit @saintmichael I'm looking forward to seeing you around.
I wish I could give you more then a penny for your constructive comment. Steemit needs more of this.
Your encouragement and kind words are worth more to me than the penny! Thanks!