How To Understand (And Get The Most Of) The Recent SBD Pumpings
Today SBD saw another pump, with a growth of over 40% reported by Bittrex, as you can see above. It's the second pump in the last 3 days, this time with far less volume. But even on low volume, SBD went as high as $2.2 before starting to head down.
The Broken Peg And Who Can Benefit From It?
SBD should stay at $1 and, in a closed ecosystem, like the one controlled by the Steem witnesses, this happens pretty much on autopilot, it's in the blockchain governance. But once SBD is "out in the wild", meaning trading on exchanges, supply and demand will kick in and we may see whatever price the market wants.
Now, price of an asset appreciates because one simple reason: there are enough buyers willing to buy at that price.
Wether or not many buyers will collide to create the impression of a bigger price, that's out of the scope of this article (but it's quite common, not only in the crypto markets). What I want to point at in this article is the relationship between SBD and STEEM.
Because authors get their curation in SBD, means that a more expensive SBD will bring them more STEEM. The main consequence of the two recent SBD pumps is that STEEM is becoming more affordable.
Now, since it's Saturday, and it's cloudy and I didn't even have my coffee, I will speculate a little.
Who wants cheap STEEM? Obviously, whoever believes STEEM will appreciate soon. You want to buy cheap something that will have higher value, right?
How can you make STEEM more accessible, but at the same time maintain the price of STEEM? Please read again that question, and try not to get dizzy. A drop in price of STEEM will send bad signals in the market. But at the same time, somebody wants cheap STEEM.
The solution: having bought a lot of SBD in the last months, at $1 apiece, and now pumping it in order to get cheaper STEEM.
Who are the beneficiaries of this pump? STEEM holders.
So my (highly unlikely to be true, since I didn't have coffee yet) speculation is that this pump is done by some insiders to the ecosystem. And it's done because something big is going to happen to STEEM, as a currency, very soon.
But of course, I may be wrong.
Going to get that coffee now. Seriously.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
Understanding this mechanism is still beyond my imaginations. If everybody knows SBD will return to $1 sooner or later, which clear minded person would buy them for $1.5 or $2. Even If supply is cut to zero, where from the buying power comes? I never had even slightest intentions to keep (or buy more) SBD even at $1.03. This sharp jump up can be nothing but dirty steem whale manipulations. Something BIG must being brewed behind the scenes.
I keep all my steem and SP strong.
it's not "fresh" SBD" in this game, it's SBD accumulated for a while.
yep.
Very plausible speculation. It is always good to ask who benefits...
Do they know something we don't? I hope they do ;-)
Well, there were signs...
Once again, as someone who doesn't "get" this market stuff very well, Thank You for the (possible) explanation of what's happening...
😄😇😄
You're very welcome!
Hi @dragosroua! @cardboard is sending you 1.0 SBD tip and @tipU upvote
!
@tipU - send tips by writing tip! in the comment, get share of the service profit :)
i think all should exchange their sbd to steem in this pumps or sbd to bitcoin and then buy back x2 sbd after some time. Im not sure who is pumping sbd, but because of its at least its more interesting now , than 2 months of stagnation and slowly price dropping
Absolutely, it gives a bit of a thrill to the entire STEEM ecosystem. Much better than stagnation, I agree.
thank you so much for sharing it :))
Yeah, I need a coffe to understand it
Good morning!
Good morning to you too :)
I feel your pain.
I can't function without coffee.
heh...I did it AGAIN.
sold a few SBD's at over $1.70...
my bank account really likes that.
Early bird always catches the SBD :) Good for you!
ten or twenty bux.
no big deal.
but that's ten or twenty bux I wouldn't have had otherwise.
Your explanation of the pump makes sense, but why would someone/people pump SBD instead of STEEM?
If they're such ardent believers of the website and blockchain, they might as well try to pump STEEM.
SBD is a smart contract on the STEEM blockchain, it's not really the core of the blockchain. And when SMTs are launched, they will be linked to STEEM, not to SBD. There, I said it :)
you said it..
(now if I only understood it)
Every big investor I have heard questioned about steem, said, "there isn't enough market cap/liquidity, so they don't invest in it.
From this perspective, it meshes with your idea of a market mover.
I must also note that the buying/selling on the internal market was happening much faster than usual.
Yes, I wanted to point something about the internal market too. It becomes way more useful now and we may see an increase in volume. The first pump generated around $40k volume in one day and the second is now at $31k, will end back probably at the same level.
On a normal day, the volume on the internal market is between $6k-$10k.