Steem Dollar going through the roof at $3,30. Is it sustainable, and why is it happening? Join the discussion
I wanna start a discussion about this and trying to figure out what is going on. Please correct me if I'm wrong on anything, and please join the discussion.
First off, Steem Dollar(SBD) has been listen on a Korean exchange where it now is possible to buy SBD directly from Fiat. Of course this has made people interested in SBD as a speculation object, as well as an investment.
Second, it has also driven the price of Steem up, but by no means as much as SBD. SBD is up over 330% from the "normal" level of 1$, while Steem was down around 0,9$ and is now at 1,35$, only a 40% raise, which is little in comparison.
Third, I read somewhere that Steem dollars are way more scarce than Steem (135 million steem and 2 million SBD). I can't confirm that, but if it is so, wouldn't that also give more value to SBD? I've read that SBD is supposed to be pegged to the dollar, which it obviously is not anymore. Does anyone know what mechanisms that pegs it to the dollar, and why? And why it has been unchained so to speak? I mean..it's a crypto currency, so how is it regulated and by whom?
Now, what kind of implication do I think it have?
People use SDB for two things. Either to boost their posts, or to convert them to Steem. The first thing is not a very attractive thing to do right now, because 1 SBD cost you almost 3 Steem. But on the other hand, you get paid back percentage wise MORE SBD than you do Steem.
So let's say you make a post and boost it with 20SBD
The post makes you 45$
You get 84% which is 38$
57% is paid out in SBD which is 21 SBD
I can't of course guarantee that the post will double in value from what you invested in, but experience wise it often does. And even if your payout is only 85% which is 38$ you still get back more SBD than you invested.
For someone who holds a lot of SBD however, they have an incentive to power up. Trading expensive SBD for cheap Steem Power and gives incentive to invest in Steemit long term.
I can't think of anything that is bearish with this? Does anyone disagree? When I first looked into it I was concerned about SBD going so high, but as I tried to argue here I fail to see much negative with it?
What do you think?
Nice thread. I've put a link into my main post on the same subject, What is going on with SBD?, with an explanation on how SBD is designed to have a pegged floor of $1.00USD, but there's no upper cap so it is able to overprice if market participants create sufficient demand. It makes sense, otherwise we'd have a real inflation problem. If someone want's to pay 3 times its guaranteed rate, so be it. Sell them your SBD!
Like others have said here as well, I think this is also very good news for STEEM too.
This is very bullish for Steem as it will refrain people from powering down and in the same time people will want more Steem Power to be able to earn more of the Sweet SBD
I think so yeah?
I definitely think so . I mean it's pretty sweet earning SBD right now :) here is an analysis I read with the same theory https://steemit.com/bitcoin/@haejin/steem-dollar-sbd-is-surging-could-sbd-be-a-leading-indicator-for-steem-check-out-these-charts
but for many its not sweet to spend SBD on boosters etc and then get Steempower in return? You spend 20SBD and get 12SBD back and 8 SP..so the incentive to use boosters/upvoter bots is reduced?
That is true. I guess leasing some Steem Power is a good option currently
@dandesign86 this feedback is the greatest answer I found on the sbd price increase. This shows the great advantage that keeps people powering up more (longer term investment), and reduces power downs. And also a good point is that we can earn much more SBD by powering up. So this is a great point you found here. Upvoted your comment. I see it as a great contribution for the steemit community. @gold84
Thanks man !
@dandesign86 you are welcome. Your comments and posts are very worthy to read. I am know following you. @gold84
Those powering down at this point will just be loosing.
Here is what I think.
SBD price peg to USD is broken and what can be done to fix it
Thanks for the input
Why the wittnesses are not using Bias variable?
So far I earned not much SBD, though I am active on the platform. I still have no idea how this works in fact...
For me i think i align with your summation.
There is currently a bullish ride within the crypto currencies domain, whether it is bitcoin or iota or steem dollar, the crypto temperatures are all on the rise. I think it is still predicted on the same old economic theory of demand and supply.
Based on historical changes, STEEM/SBD does not react to BitCoin or other coin movements. This is something else.
Agree. Steem and SBD usually go their own ways..
I've been asking that same question for months. I think that for now the only thing that keeps it linked to the dollar is the belief on the part of those who trade it in the market that that should be its value, because that's what they told us, but the truth is, I do not know how they link their value to the dollar.
Nope. Me neither! Hope someone can explain it. I found this;
This post has received a 8.31 % upvote from @buildawhale thanks to: @scandinavianlife. Send at least 1 SBD to @buildawhale with a post link in the memo field for a portion of the next vote.
To support our daily curation initiative, please vote on my owner, @themarkymark, as a Steem Witness
If you get paid in Steem POWER and SBD from the Rewards Pool, how could there be less STEEM than SBD? Or is it because so many people got Steem POWER a year ago and they cashed it out to STEEM and sold it for BitCoin, which crashed the price of STEEM?
BTW, I guess we can just blame the South Koreans for this. They opened some exchanges and are freaking out about the pending war with North Korea.
I've read that there are 136 million or some Steem, and only 2 million SBD. And while Steem increases every year, SBD does not? So with time what is keeping SBD from becoming more valuable than Steem?
But, we get paid in SBD from the Rewards Pool that increases each month. I can't imagine that SBD is destroyed at the exact same rate it is created to pay Rewards.
Well, it seems that it is worse than those numbers.
According to https://coinmarketcap.com