Is Steem in a Bubble?
Steem's price have gone up a lot as well, not just Bitcoin, so let's see whether Steem is in a bubble and should we expect a correction? I have explained my position on Bitcoin in my other post, and the issue is that relative to fiat currency, pretty much all coins are in a bubble, but that doesn't mean that Steem and others are not massively undervalued or that they don't have potential in the future.
I have watched this video all the way through:
The older guy was just mentioning Steem and how it has no cash inflow, making it prone to crash given the inflationary nature of it. Or in other words Steem doesn't have a revenue stream, but it essentially distributes investors/speculators money to content creators.
So in that sense he may be right, because at this moment Steem is not in it's maturity. It's still in growth phase, but the network effect is what it matters.
An economy grows linearly usually, and that linear growth is due to commerce and adoption, as in people using that currency for everyday purchases and storage of wealth. Without these, there is no intrinsic value nor inflow of cash to make up for the inflation.
Steemit itself already gives social value to Steem. Then we have also the following:
- https://steemit.com/steem/@ash/how-to-setup-and-topup-a-steem-powered-debit-card
- https://steemit.com/marketplace/@msutyler/announcement-steemmarket-introducing-a-marketplace-to-buy-sell-and-rent-goods-and-services-with-steem
- https://steemit.com/trending/steemit-ideas
- https://steemit.com/trending/steemit
A lot of new services are coming, so Steemit might be just a social platform now, but in the future it could be much more, an entire economy can be built on it, we already have the people, now we just need a market.
I believe you can even buy stuff with Steem on Openbazaar via Shapeshift transfer. So on the spending side Steem is already covered.
What needs to happen is for some kind of revenue system to be built on Steem, like some advertising feature integrated into Steemit or something like that. Maybe a Steem mobile wallet, or some sort of revenue stream.
Like Steem based gambling is also a good one, gambling is always good:
So there is some influx into Steem, but not enough, I admit. But as I said above it's still in a growth phase, so there is a lot more room.
So even if we will see a correction of the entire crypto space relative to the fiat currencies, it will probably come back, because this is a growing economy here. However I am certain that altcoins are undervalued relative to Bitcoin.
Because if Bitcoin pops, most money will probably go back into fiat, but some will trickle down, and that some might be like 5 billion USD, which is enough to pump up a lot of coins to heaven.
So Steem may be a little bit overvalued relative to the USD, but it could reach this real value in the future as more people join, plus relative to BTC it could increase a lot.
It's a game of relativity, it depends from what of point of view you look at it, after all all value is subjective. Who knows maybe fiat will crash too, once we will have very good storage systems where wealth can be stored better than in fiat.
In conclusion I think Steem and Steemit is very valuable, and I don't think their growth is anyway near it's end, so the price should reflect this more often than not, but correction could happen in the meantime.
Disclaimer: The information provided on this page might be incorrect. I am not responsible if you lose money using the information on this page! This is not an investment advice, just my opinion and analysis for educational or entertainment purposes.
Sources:
Bitcoin is a gateway crypto now. Monero and ETH are already replacing it in some areas of payment. As for Steem. It's a freaking blockchain social media with the potential to grow beyond it's current position of being content-posting website. No fees on transactions and a huge community can and will make enormous impact on the market and the whole structure of internet as well. Zappl is incoming which means more users and flow of Steem currency, because not everyone likes to blog, just like Facebook-Twitter relationship but with a much greater potential. We are still in a fetus phase and have survived what is called in economy "death valley" - which means that certain future without bubble is upon us. :) Thanks for sharing this informative content, upvoted!
YES
it's a bubble
HURRY
before it's too late
send all of your STEEM
to me
all seriousness aside.
That debit card thing sounds too good to be true.
But I tried it anyway
Not EXACTLY
I've ordered a shift card (coindesk)
we'll see what happens when I get it.
Great article. I totally agree, as soon as an paid advertising system is integrated, the "this is a ponzi" debate is off the table.
The content here already has value. Like information value OR entertainment value. People buy Steem in order to "collectively" give them to their favorite authors via inflation, the minted Steems proportional to their Steem Power.
This is essentially no different than buying your favorite band's CD, or buying a DVD movie with your favorite actor in it.
It's just it's not direct payment, but payment via inflation, which actually has less impact on the price than if it were directly spent, because inflation itself is a kind of "deferred gratification" the market is smoother.
Even when the Steem price was going down, it went down smoothly, not in a huge crash.
We need that asap
There indeed is a massive difference between a decentralized bubble based on demand and a centrally planned derivatives bubble based on manipulation.
I've often said, Bitcoin and Ethereum to the crypto bubble are like Amazon and Google to the dotcom bubble. We shouldn't worry right now. We'll see massive fluctuation and potential future problems in the next ten years, but this is a patience game and even still, it's not as much of a patience game as most stock trading.
In about ten years or so the FED will likely dump a ton of crypto, screwing us, but that is if the FED is still around. ;) By then crypto may have already pushed the faith out of the worthless debt based fiat system!
Central banks don't have control over the monetary policy of cryptos, they can only manipulate the fiat side.
Precisely my point, that's why cryptobubbles are not the same nor even close to the detriment of a derivatives bubble.
I'm just saying, the FED can technically buy up tons of bitcoin or ethereum and dump it crashing the market. They have the power to do so. But it wouldn't make sense for them to do that now. It would make more sense for them to wait until way more people are involved. That's why I don't think something like that would be a reality for a good decade or so.
So the risks we currently face are strictly free market and that's a beautiful thing because demand will prevail in the market. :)
The Fed does it probably when crypto space is $10 trillion or much later?
I don't think they want to put any money into cryptocurrency since they can't take back that money, it will be outside their control.
The regular banks might play with it, because they are just profit makers, but the central banks are just protecting their turf.
Ah. Ok
Keep in mind, the Federal Reserve doesn't care about profit. If anything, they like breaking the bank as long as the populace is thrown into debt with them.
Jeff Berwick did a great piece on just what I speak of.
No you don't understand, that is not how the banking system works.
They loan money to banks to play on the financial markets, then the banks default on the debt, that is when the market crashes. It's like pumping air in a baloon.
Overleveraging is one issue, which I saw the PBOC has taken care of at the chinese exchanges. The other one is just the loans and ponzi instruments that are built on top of one another, derivative house of cards.
Oh I'm well aware of the derivatives market and monetary manipulation. I'm just saying the Fed in an attempt to attack our way of escaping the central banking system could technically attack us but it wouldn't make sense for them to do so until the market is far greater.
Jeff Berwick has spoken on this several times and makes some great points.
True
Good information here. It's early days for the Crypto's , but the useful ones like Steem will prevail and thrive.
Yes, the useless ones are already struggling like Fedora and Dogecoin.
Is that really a relatively price between BTC and other crypto currencies？
If you think BTC will be the reserve currency of the world, then you should compare things to BTC not to the USD.
I think I got it, thanks for your reply.
Congratulations @profitgenerator! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honnor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPIf you want to support the SteemitBoard project, your upvote for this notification is welcome!
There is no bubble! Just look at our yesterday call! This is awesome! @steemboost is happy! :)
Good analysis @profitgenerator. Steem price is going to gain traction with more mainstream adoption and value added sites as you mentioned. Upvoted and following. Follow me :-)
This post has been ranked within the top 80 most undervalued posts in the first half of Jun 07. We estimate that this post is undervalued by $18.94 as compared to a scenario in which every voter had an equal say.
See the full rankings and details in The Daily Tribune: Jun 07 - Part I. You can also read about some of our methodology, data analysis and technical details in our initial post.
If you are the author and would prefer not to receive these comments, simply reply "Stop" to this comment.