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RE: Steem as a Digital Currency

in #steem7 years ago

In my opinion the reason that the price of Steem has been consistently decreasing is the fact that there are a large amount of very large holders who are willing to sell at a specific price, combined with the absence of the required number of individuals to buy Steem as a means of investing.
Any time when Steem's value begins to increase, the increase is nearly always met with a very strong sell resistance which quickly drops the price back down. Steem as a cryptocurrency is different than others in respect that many medium to small size holders didn't necessarily have to invest "money", but rather time and effort.
In most cryptocurrencies, many holders will take a specific position and not sell until it is profitable, but when individuals don't have to invest currency to acquire the Steem many individuals are willing to sell during a price increase. Much of the Steem volume traded is likely from early adopters and witnesses who have recurring costs, meaning that they need to have a flow of income to come along with it.
I have heard from numerous different users things such as "I would sell at x price" and that's not necessarily a bad thing, but when a large percentage of users would be motivated to sell at specific prices, maintaining any major price gains would likely only be possible if there was a significant increase in investment into the Steemit platform.
Especially for individuals who acquired their Steem through rewards , individuals want to ensure that they actually get as much as they can out of their Steem if they have a short term view rather than an investment view. The abundance of sell motivation during any price gains make it very difficult for Steem to hold any of the gains it has earned.

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