How to bring back Steem price to $1 and keep it there.

Steemians argue that $1 is a magic number for Steem. If Steem is priced at $1, many full time Steemians specially from developing countries can make their end's need.

Interestingly, at current low price, an active Steemian with 100K SP will not make the end's need in the developed countries.

The most passive way to earn Steem is to delegate to a bidbot or an DApp for tokens which is traded in exchanges such as HUNT or PAL. For example, delegating to @steemhunt can earn an investor 20% APR, in that case $100K SP delegation will earn 20K equivalent Steem in Steem, SBD and HUNT. It is around 1670 Steem per month. Even we consider Steem price is at 35 cents (as of writing it is 28 cents), then the investor will earn $585.

If he is single, lives in food stump and medicare (i.e. poverty) then he/she may live from hand to mouth. But for a family of four, it is not even close with all Governmental benefits. The irony is that an investor who can afford 100K Steem, may be well off enough through his/her other employments and investments.

Bottom line is that to live off Steem blockchain one from developed countries has to have at least 500K Steem. Or, with 100K Steem he/she has to be a blogger with popularity or skill to the level of @exyle, @taskmaster4450, @tarazkp, @whatsup, @meno etc. There could be few dozens of bloggers who can be supported by their followers to earn decent amount of Steem. Even then I doubt that if they leave their jobs they can hardly sustain.

Therefore, my assumption is that 15 STINC employees, top 20 witnesses roughly another 25 whale investors with more than 500K Steem, or 40 active bloggers with decent amount of SP (50-500K SP), in total around 100 people in the developed countries can sustain their living from Steem blockchain. With $100M cap blockchain, the number is quite pathetic.

However, these numbers will be drastically different for developing countries. It will also hard for investors from developing countries to invest/buy 100K or even 50K Steem. If we assume another 200 people from developing countries are living off Steem, then it is shame that only 300 people can sustain their living from a Global Blockchain.

However, if we can bring back Steem price to $1, then this number can be 1000. If we can make it $10, then this number can be 0000 or even 100K.

What we can do to bring back Steem price to $1?

There are roughly 100M Steem that is in liquid form. And, we can assume 80% of them are in exchange. Let us do an wild guess that out of 80M Steem that traders want to sell, 40M of them are going to be sold at $1 and below. Therefore, a rough estimation for these 40M Steem is ($1+$0.30/2=65 cents). Or, roughly a group of investors or a startup with $25M can buy up all the 40M Steem to make Steem price $1 or above. The estimate could be around $10M since when potential investors will try to buy up 40M Steem, sellers will remove their sell orders.

It is a shame that Steem can't find investors with deep pocket of $10M to shoot the price to $1. My best guess is that Steem lacks speculation similar to its peers.. At this stage, most value of cryptocurrency is driven by speculation. On the other hand, Steem may have a negative speculative value, which means it is priced lower than its most valuable products (MVPs).

However, once Steem price reaches at $1, there will roughly 300M Steem that will be produced in next 15 years and after that 6M Steem a year. If we assume that half of these Steem will be sold in the market. Then another $150M capital has to be brought to the Steem blockchain to sustain Steem price at $1.

Another way to think is that Steem blockchain (including all DApps with SMTs or SCOTs) has to generate $150M profit or $10M per year profit to make Steem price at $1. It means that external investors has to buy up $10M Steem each year.

The other way around is to sell Steem in large number of Steem during bull market and create buy walls to keep Steem price at $1 during bear market. For example, if 10M steem could have been sold at last bull market on average at $4, then $40M buy order would be good enough to sustain Steem's price at $1 for a decades considering that Steem will go above $1 occasionally than some of the bought back liquid Steem at $1 will be sold again.

Though this policy has not been applied for any cryptocurrency. But I doubt that TRON, EOS or Cardano devs or the investor group of these cryptos consciously or unconsciously are keeping their coin's price above the certain threshold. They became lucky or showed smartness by launching ICOs at near the peak of bull market and have now war chest of billions. They can intentionally buy back large number coins if the price of their coins go down form a threshold.

The only sustainable way for Steem is to manage $10M earning by solving real world problems. If we assume there will be 100s of successful DApps (i.e. websites), if each of them on average can earn $100K per year in Adrevenue or other income source- it will reach $10M per year.

However, currently Steemit, sprintertalk, @oracal-D or Steemhunt may mange that mark. But Steem need another 96 such DApps to reach that land mark. Or, DApps have to find other income sources. One of the way is to sell ICO, however, I hardly doubt that we can have 100s of successful ICOs. ICOs are oversold. Hardly any tokens in @steem-engine is reaching their sell walls. Therefore, Steem DApp entrepreneurs has to find other income sources.

But the bottom line is that a group of investors or a startup with $20-50M capital can bring back Steem's price to $1 and keep it there or above for ever. However, they have to find other income sources (e.g. Ad revenues, token sales are not good enough) to survive or flourish in the long run.

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Peace
@dtrade
Crypto-miner, trader and blogger since 2013