The Definitive Steem Strategy

In light of all the talk about the Steemit platform and what needs to be done to it I feel compelled to give some more insight as to what people should be paying attention to. If all things are at a constant and the price of Steem is stable then I totally agree with a lot of the people on here that the content on this platform is what will keep it going. However, for the time being, Steem is NOT stable and therefore a strategy for the external forces influencing the price of Steem should be the focus.

Simply put, if you want to predict the price of Steem (as of the time that I’m writing this) you need only pay attention to the value of the US dollar and the yield of the US 10 year bond, period. You can find the value of the US dollar relative to other currencies through an index called the “dollar index” or “DXY”. The 10 year bond yield you can find on any financial website showing the various pricing of bonds. This is all readily available information.

The strategy for predicting the price of Steem is simple. Since Steem is considered to be a risky asset (as seen in its price volatility) it moves along with other risky assets. So, never mind looking at all of these daily charts and monthly charts because these cryptos don’t have much of a history for that yet. What you want to do is look at both the price of the DXY, determine whether it is going up or down and to what extent. If the DXY is going up in value this tells us that people are buying dollars and the dollar is strengthening. This is a common move when people look for safety from risk. The other part of the risk trade is to look at the bond yields. If the bond yields are rising this means that investors are dumping the bonds and the yields are rising to attract investment. If the bond yields are lowering this means that the bonds are being bought up, lending is loosened and thus investment risk is on the table.

So, if we want to know if Steem is going to rise or at least be stable we would look for the DXY to be rising and the bond yield to be down. The opposite would be if Steem would be going lower. Please note that this strategy is assuming that there is no internal Steem related data causing it to go down like a hack or problems on Steemit. Assuming that all data is good or at least neutral the external signals that you would want to pay attention to are the ones mentioned.

While I do have an academic background in business and a history of investing I am not a financial advisor. Remember that when making any financial decisions that you do your due diligence in research and contact your financial advisor before taking on any investments. Other than that, hope this helped!