Key Peak Indicator: STEEM / SBD Market Approaching 1.0, 250% increase over last week,
STEEM/SBD is approaching .85 today after rising from approximately .35 just a week ago. For those trying to find the peak of the current run-up this is a crucial indicator to watch. At the top of the very highest peak in July 2016 (before an 80%+ crash) this ratio hit a high of 4. During the run-up in STEEM over the last few weeks it was often below 0.5
STEEM/SBD is a key indicator
From a mathematical perspective, the (non-speculative) value of STEEM comes from the upvote power that it produces. Right now you need about 30 STEEM for a full powered vote to increase a post value by 0.01. You get about 9.96 votes per day, so currently 30 STEEM generates about 0.10 a day, or 1 STEEM generates about 0.0033 each day or about 1.20 per year.
However, that 1.20 is not paid out in USD, its paid out in a combination of SBD and STEEM itself which is why the SBD to STEEM ratio is so important in understanding the underlying value in STEEM as a currency.
Most transactions into BTC/FIAT are done with STEEM
To actually assign a dollar value to the upvote stream provided by a STEEM toking we generally need to imagine converting the post rewards back into STEEM.
This is where the SBD to STEEM ratio comes into play. By default rewards are paid in 50% SBD and 50% STEEM. When SBD is worth less, relative to STEEM it devalues post rewards.
Take that 1.20 reward we discussed above. If 50% is paid in SBD and those .6SBD can purchase 2 STEEM (which was true a week or two ago), our 1 STEEM is generating 2.6 STEEM each year.
However, if they can only buy 1 STEEM at a 1-1 ratio our 1 STEEM is producing only 1.2 STEEM per year. When the STEEM ratio goes down the value of the voting stream goes down with it.
If STEEM/SBD shoots up we are near a peak in STEEM price
Its always hard to extrapolate, particularly when speculators are driving up the price of STEEM, and because SBD was pegged to 1USD for so long we don't have a lot of past data, but from a value investment perspective, it is logical that as the STEEM/SBD ratio gets higher, the value of buying more STEEM goes down. I'd start to get very nervous that we are in bubble territory if STEEM/SBD gets over 1.5
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thanks for sharing
I think that sbd is the rare coin here. The only way it is generated is by content going through the blockchain. I'm lucky enough to be a person who can do this trick and I'm doing it as fast as I can right now. See @pengiunpablo's recent activity report - there is no way this is going down anytime soon. People are flocking in and the Alexa ranking dropped another 100 points this week.
Agree, SBD is less accessible in many ways. Hard to know for sure where the market will end up, but I suspect that SBD > STEEM is a more natural stable state.
That's what I thought as soon as I got here. Every one has steem for the sp, few have sbd or generate it well.
Just. Keep. Posting.
Thanks
Yes I agree that the SBD/STEEM Ration is very important and somehow I have the feeling that we will stay at a Ratio around 1:1.2 for a long time. Why not have SBD 10$ and Steem 9$ it could go on for a while.
that could well end up happening, will be interesting to see.