If At First You Don't Succeed: Buy More Steem!
If At First You Don't Succeed: Buy More Steem!
This title may sound odd, but I'm sure all of my loyal followers, who start to slowly grow, know that I'm a huge advocate for the "Power Up" feature.
Well, today I'm going to give you the specifics of why "Power Up" is the best feature you can use to succeed financially in this platform - and no, I'm not going to speak about the basics and the advantages that this brings, I'm sure my followers know that by now.
What's I'm going to discuss is:
- Why you should NEVER hold SBD;
- Why your SBD will buy you less and less STEEM
- How to Properly Manage your Wallet Decisions
...and some other variables.
If you want to learn more about these topics, then this post I've written right now is just the post for you, so grab a cup of coffee and read me out.
Don't forget that everyone can disagree on these things, and if you think I'm wrong I'd love to read about it down in the comments section.
Here we go...
Why Should You NEVER Hold SBD: Depreciating Currency
To understand why Steem Backed Dollars are a currency that will depreciate with time we have to look at the laws of the market.
In trading, and in markets in general, an asset appreciates in price if the demand is higher than the offer. On the other hand, if people want to dump the asset more than others want to buy it, it will depreciate.
So, let us check the incentives you have to keep SBD:
Think about them... you can pay bots with it, and use it for a transfer or another, and that's about it.
Now, the reason the price of SBD is increasing is that people are getting them at a faster rate than the rewards can produce it, and they do so because they experienced an initial climb which triggered the Fear of Missing Out (just learned this today, up to today I just couldn't see why it rose).
On the other hand, let's take a look at the incentives you get to keep STEEM:
- It is the main token, available on exchanges;
- You can use it to Power Up and increase your power;
- You don't get it in rewards as much as SBD, so it's rarer;
- It is what people focus their investing on.
Now, as you can see, you have a lot more reasons to keep STEEM. Finally, I just want to add that you are always selling Steem Backed Dollars (SBD) to buy Steem to either power up or cash out.
Having said that, it is there for all to see that STEEM has all the reason to climb in time, while Steem Backed Dollars has more reasons to decrease in value, rather than increase.
How To Manage Your Steemit Wallet: Decisions, Decisions!
On the other hand, you also have another variable to consider. If you want to properly manage your wallet and if you consider what I stated in the post above, then you have to know that as time goes by, STEEM will increase with value, and as STEEM increases with value, SBDs will buy less of it.
Think about the following:
- Steem has all the reasons to grow;
- SBDs, even if experiencing a parallel increase (which is unlikely for the reasons stated above), won't accompany the growth of the main token;
So this means that we'll reach a time in which 1 SBD buys 0.20 STEEM and so on.
This makes it pretty worthless to hold SBD and wait for a better ration, you should Power Up as soon as possible. FOMO doesn't last forever.
On the other hand, when should you take profit?
Well, from my point of view, you should take profit regularly to ensure you pay yourself. For instances, try to take 20% of your incoming rewards into BitShares and trade with it, or store it in a pegged crypto.
I don't think you should convert the tokens to FIAT though, unless you really need to.
This post served more to give you guys an idea on how SBD and STEEM differ not only in the fact that they both have very different incentives to hold but also in the fact that while STEEM is undervalued, SBD isn't... and it may even be overvalued.
If SBD climbs, and I wouldn't be surprised if we see a little surge, it is merely speculation and won't last.
So, if I were you, I'd give more love to the token of the platform rather than to this parallel token.
Finally, if you don't succeed financially in Steemit... buy more Steem.
It will rise, so even if you have little by today's standards, you may have a lot on your hand by the end of the year.
Cheers
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I'm not the only one here who has done this, but I did consistently SELL SBD and Power-UP the steem I bought. SBD's are by design supposed to never drop under $1 U$D Fiat, but they did rise high above it, and this led to a HODLing phase which helped keep prices high. Right now the Steem price vs SBD will get you 1.35 SP for 1 SBD, which is a bit better than yesterday when it was just 1.2-ish. I pretty much buy SP right away, because as Max pointed out, the general long term trend is a higher Steem/SBD ratio. I made a lot of hay when it was 8:1 and 6:1, as I correctly identified the high SBD price as an anomaly, and did not think it would last long. The great thing is that SBD has actually "PULLED UP" the Steem Prices, which is good for everyone in the long run!
I am using the basic DCA principle here, and in this rising SP/SBD ratio, that means it PAYS to CONVERT your SBD to SP as soon as possible!
I Dumped it as fast as possible when it was really high, which is another key to reaching the coveted 5000 SP level so fast. These advantages do not last long, and in reality SBD could drop well under Steem Prices pretty soon! STEEM has been trading sideways since the BIG run-up to $8, back down to $6.50 range, but some are predicting the next leg up to $12-$14 range. Get Ready! But SBD might drop behind, even if it goes up from here... $8.67 right now, but it was as high as $20 on some exchanges recently, like late December. If SBD drops under Steem, I will do 100% power-ups so I do not lose money by converting... But that is tricky too, you have to take the actual SBD "value" issued versus the steem "value" because the system 1 SBD as if it were still $1 USD priced :D
MATH IS YOUR FRIEND!!! Learn the ropes, and make the best decisions!
IMO it will be a long time until 100% power-ups make sense, money wise....
Upvoted your comment at 100% power because it is simply golden! Yes my friends and followers, always do the math as this is a numbers game... either this or get a human calculator friend like I did. Thanks Underground.
Very true so lets power the hell up!
Let's !!! :D
So cool to have found you here thanks to the post of @taskmaster4450
Since I wrote about FOMO today too, it´s good to hear about the different angles people are coming from... I try to hold at least some SBD though, because with them I can pay for the upvoting bots - without them, it seems really hard to get seen.
Oh boy and how excited I am about the idea to be able sometime in the (hopefully) near future, to pay forward to new users what I have learnt and earned!
Thank you!
Glad you found your way to my little hub. Yes I do the same, that's what I use a small amount of SBD too. You just can't compete as a newbie without enlisting the help of those mechanical helpers.
Cheers mate :D Hope to see you around more
interesting view of looking at it , i didn't consider most of the points until now.I've powered up almost all my steem as of now lets see how this plans out.
Im powering up like crazy myself...
Alright then, you made me convince to buy more steem with my just earned SBD (I also have some more to come). I'll mention about you in my upcoming steemit jornal entry. Thanks for the info!
Thanks Kuminga, will definitely take a look at that :)
I think this is good, but you are missing one piece: if the steem price doubles, the SBD printing doubles as well. That supply injection is going to drag the price down when steem grows. I don't think this is emphasized enough.
Also, 100% power ups never make sense. One can use the convert button to make that decision if they wanted to do so. But better to have the freedom to choose how to convert SBD , sell SBD or hold some.
The added printing will decrease the SBD more... more offer, less value.
You do have a really good point in the 100% power ups, should be considered.
Yes, I meant to say that it's additional support to your main points :)
I'm around 3 weeks on Steemit, and getting my first payouts! Time to think about strategies :D Powering up sounds like a great plan for now given your insights - investing in the platform that is giving me so much already is almost a no-brainer :-)
I agree with you, investing back into STEEM is the best thing you can do... I think STEEM will still rise a lot in price and early adopters are going to get rewarded.
That’s a positive mindset! I’m looking forward to ride the Steemit Waves :-)
Depending on my financial situation, I power up as much as possible.
And you do well... I'm also powering my way up the ladder... one day we'll both be whales muahaha :D
Thx, I def put in the time. I'm passionate about the platform and All the cool people I get to meet. 😊
Interesting post i'm pretty new to steemit so i'm just learning how everything works. Very informative though thank you!
You're welcome, glad you took value out of the post!
found this very helpful, I have just one question. thanks for the information. somehow i always suspected that steem was the way to go
What's the question?
Lmao, i forgot.....question was would you advise me to set my post earnings @ 100% sp?
No! Don't do it. As long as SBD is higher than STEEM you should always do 50-50 and convert the SBD you get to STEEM. When SBD gets lower than STEEM start doing it.
thanks a lot sir,
I'm sorry i laughed so hard at that. Maybe he forgot. That happens 😉
Haha, it happens o
When you are trying to write code and learn from steemit at the same time
You rolled with the punches good with that. Hehe. You did remember your question though! 😊