My Steem Investing Analysis: Buying the Bottom Versus Dollar Cost Averaging.

in #steemit3 years ago

I love the steemit platform and see a lot of room for growth, decided to start investing a few months back with some extra funds I had. After the last fork I did the math and realized the middle of February would be the end of the power downs for those that started right after.

My two options were to invest over that period or wait til the end to buy the bottom. Not being very confident in my predictions I decided to dollar cost average over the last few months as the whales dumped that were going to. The fear of missing out is real and I did not want to miss an opportunity.

Luckily I joined steemit at the beginning of December and missed that first rise and drop of price. Looking at the charts just from a basic perspective it seemed like a good investment. I like long term entry points on charts moving sideways for the most part.

As you can see from the analysis I have purchased 2,846 steem for .5121 bitcoin over the period. At the current price of bitcoin that is an investment of $530.23 which to me is a significant amount. The current value of the purchased steem is $377.77 putting me at a current loss of $152.46. Now my break even point for the bitcoin value is .00017992 per steem which is currently about $.19 this does not concern me much though. The price of bitcoin was lower for much of the buying period so $.185 is my actually break even amount per steem.

Had I gone the other route and just bought .5121 bitcoin worth of steem today instead of over the period I would have 3,909 steem. This would be an extra 1063 steem in my account which is roughly 33% more than what I was able to buy, ouch! Doing my best to not dwell on that fact as I did not know for certain what the market would do and just had an idea.

The silver lining in all of this from an investment point of view is that I now have more than what I purchased in both dollar, bitcoin, and steem. By creating good content and getting payouts I am winning in a big way so far for this venture. My real break even price for steem if I stopped posting and investing right now would be $.09 per steem.

That would be the lowest point steem has reached so here is to hoping that is not in the near future. I plan to keep posting but will most likely stop investing for now. My powerdown will be around October if I decide to, according to the road map the mobile app will be dropping in Q4 which should cause some price increase. Christmas is always an expensive time of year so the extra funds will help. Thanks for reading, any analysis is appreciated.



what exactly does buying steempower or powering up accomplish. till date, i am still trying to fully this out. apart from curation rewards, why do people want to power up. i have never withdrawn and have most of my earning in steempower but i dont think i see any difference btw now and when my steempower was say 50. why dont people buy steem or or keep it steem instead? what happens in the long run if you have steem power? why not steem and let it just keep fluctuating? or doesnt steem power fluctuate according to steem fluctuation?

what happens in the long run if you have steem power?

STEEM Power gives you two measurable benefits in terms of rewards.

Regarding curation, the more SP you have, the higher your rewards can be. All other factors being the same, an account with 1000 SP will earn more curation rewards than an account with 100 SP for any upvote. A 10,000 SP account will earn more than a 1000 SP account. Better curation habits can yield higher results, but generally speaking, more SP should earn you more curation rewards over time if your voting strategy is the same.

The other benefit of more SP is how much your vote is worth. The higher your SP, the more you can earn with a self-vote...and likewise, the more you can give to others when you upvote them.

Other than those two reasons, the benefit is bandwidth use/limiting, but that doesn't really affect anyone but a very tiny fraction of users. It'll be a bigger factor for businesses, should they ever begin using the STEEM blockchain, due to the potentially large amount of daily transactions that they would need.

Steem Power collects interest correct?

Steem power goes inflationary up with steem as vests

If you hold onto 1 STEEM you will have 1 STEEM forever.
If you power up your 1 STEEM into STEEM POWER your 1 STEEM/vest will go with the #inflation
(steem_per_mvests 236.342 - this number goes up - you get more steem in time pased from the initial STEEM to STEEMPOWER-vests conversion)
and be in time powered down into more #steem while they are being inflationary created....

Yes, it does collect interest, but that's mostly (or only?) to cover the loss in dilution from the daily inflation. So, it's basically a wash.

Seems like it only covers dilution which is not a "wash" compared to liquid steem.

Of course not, compared to liquid STEEM. I was simply pointing out that the interest from inflation isn't actually "interest." It just keeps you at the same number of vested shares from day to day.

Right, glad to have this finally sorted out. I feel the faq needs updated a bit.

thank you david. i just saw this. so if one does some earning by upvoting his post. oh okay. how do i find out how much my vote is worth?

You can check this out, seems off by a decimal point though. My votes are work about two and half cents right now.

So your amount of steem power determines the amount of weight your upvote has. Higher the steem power, the higher the reward the author receives when you give them an upvote. Steem power also receives interest to protect it from the inflation of steem where just the spendable steem does not. To convert steem power back to steem takes three moths and you get a portion each week. This is good for me because I have a weak hand when trading, the power down process ensures my patience.

Let me know if that covers it for you, thanks!

hmmm a lot said. so when does the interest happen. i dont think i have noticed that. and let's say i upvote someone and he gets 10$ for instance, does that do me any good too. if so what good?

Upon further investigation powering up your steem converts it into vests. The amount of vests stays the same but you will get more steem for them in time due to inflation. This is where the perception of interest came from. That $10 does you good if it is content you would like to promote to the top of trending. If it garners more votes from there you receive a higher curation reward. You also have the warm fuzzy feeling of helping someone if you are into that sort of thing.

thank you. i am definitely into that sort of thing. that is what life is about! but it also does help to know that my vote has some worth, so that it accomplishes helping someone.

These are all good questions that I would, also, like to know.
Resteemed to follow this conversation. Thank you.

Let me know if that answer covers it.

impresionante por la cantidad de movimientos transaccionales

Thank you, I should have just one transaction today though lol