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RE: The Buying Side of Steem Dollars on July 4th? How do we clear some of our Steem Dollars?
Selling Steem Dollars for Steem is, in effect, buying Steem. So the first effect is to drive up the price of Steem. If those Steem are dumped for BTC then that will drive the price back down, with the net effect on the price of Steem being quite small. There may still of course be short term volatility, and I'd even consider this somewhat likely. Should be interesting.
If the market is deeper and the peg tigher on the internal market than in the STEEM:BTC market, the net effect of cashing out will be negative for STEEM, wouldn't it. And the opposite too.
Well if nobody wants SD and nobody wants Steem then clearly they are both crashing, but the effect you describe is self-correcting. When the Steem/BTC rate drops then SD sellers will demand even more Steem.