Can STEEM be top 5 coin (again) and have market cap of $10B?

STEEM launch was a boom. It shoot to top 4 coin at CoinMarketCap. Since then STEEM has seen lots of ups and downs. Its value crashed to 7 cents and rose to all time high at $8.5. It rank went down to 47 and come back to 23. Now it is quite steady around 25.

Can STEEM jump to next level 20, 15, 10 and finally top 5?

For that we have to understand the market dynamics, supply and demand, popularity, fan base and finally, fundamentals.

It looks like STEEM is one of the best coins with fundamentals. It's has the highest scalability with capability of 100K transaction per minute, zero cost transaction and 3 second confirmations. It is one of the securest coins in the world due to abstraction of power-up and delegation. It has a flourishing ecosystem.

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The marketcap of coin is little bit confusing since does not show the whole picture. For example, total market cap of all cryptocurrency is around half a trillion dollars. It was $800 billion dollar a month back, it looks like the market lost $300B. It is not that simple. A few amount of money goes in or out compared to $300B. For example, when sentiment changes from bull to bear, traders place their sell orders to lower and lower. At some low price point, a couple of sells and buys are made that could be couple of millions or billions. But $400B loss is just a number, that shows current market price of a coin and multiplied by the total coin circulation. Most of the coins are sitting in exchanges or people's wallet so as fiats.

Here comes STEEM's scenario. People speculate and trade on STEEM's price like any other coins. There are around 50M million liquid STEEMs compared to total supply of 250M. Out of 50M, probably 70-90% are in the exchanges where traders buy and sell.

However, sell pressure is little bit higher for STEEM than other coins because lots of people live by STEEM's earning rather than simply holding. Currently, we are at kind of equilibrium where sell and buy matches eachother. STEEM's comparative stability of price suggests that. However, at some point, demand can outpaces supply, due to new users willness to power up or big buy orders from investors.

It happened very recently, when BTC first time touched $8K, STEEM was $0.9. Now STEEM is $4 and BTC is $8K. Therefore, STEEM's demand has risen more than 4 times. It can happen again, if it rises 4 times then each STEEM will be $16 at BTC still at $8K. At $16 a STEEM, it will occupy 14th rank.

Another issue is that STEEM is still distribution phase. Lots of investors have bought STEEM at low price and founders (e.g. @dan) have millions of STEEM as their rewards. They are selling to downsize their holdings. For example, @dan is down to 750K STEEM from his initial holding of 3.5M STEEM. Once big investors or developers sell out their positions, supply of STEEM will drop sharply, on the other hand, demand can rise quickly since new signup is exploding. With upcoming HF20 release, STEEM will have community features and easy signup process. SMT will be released with or after HF20. These events will create big demand for liquid STEEM. With dwindling supply and high demand, STEEM price can rise quickly to 4-8 times.

We have seen this kind of scenario with lots of other coins too: LTC, ETH, XRB. Therefore, STEEM's heydays are ahead.

Disclaimer: This opinion is not a financial advice, it is my personal perspective and opinion. Please seek professionals for financial decisions.

Image sources: Most images are open sourced (e.g. Pixabay) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@riseofth
Cryptominer since 2013, occasional trader and tech blogger