Exchange Strategies

I'm thinking about this in the context of @SteemCampUk, but it's an idea that will be around for a while. As long as we have a mixed economy of volatile crypto assets and currencies, we're not going to have a simple life of frictionless exchanges of value. So how do you manage the situation where everything is priced in something else and the prices can go up or down but at some fixed point you need to collapse it all and make a payment in the real world?

For the last few weeks I've been watching people pay for @steemcampuk in SBD, STEEM and £Sterling while the price of the first two in terms of the third kept steadily sinking. At some point next week, I'm going to get a bill, payable in Sterling and I'm going to have to turn this diverse pot into one thing and pay up.

I expect that in the immediate future, this pattern is going to become more prevalent rather than less, so I want to explore what some good strategies are for thinking about it and making it work for us rather than against us.

This is the data we've got at the moment (1800GMT on 04/04/2018):

STEEM Price (£): 1.174
SBD Price (£): 1.626

STEEM in pot: 84.359
SBD in pot: 63.591
£ in pot: 52.00

So the current total value of the pot is: (84.359 * 1.174)+(63.591 * 1.626) + 52 = £254.436

The question is:

Given that the prices will change unpredictably, how do we maximise the £ we have say, next Monday, when the bill arrives?

Ignore for the moment the possibility of more people coming and more going into the pot, that's not the issue at hand. What I want to know is how do you best think about and deal with the uncertainty around the total value of the pot as it stands and what principles you might use to maximise that value in £Sterling terms for a set date in the future.

You could generalise this problem to anything where you have to raise a certain amount of fiat at a fixed time, but you want to collect from various sources in STEEM and SBD.

I can see a few pathways:

1. Keep everything as it is and sell the SBD/STEEM immediately before paying the bill. Keep crossing your fingers that the STEEM/SBD prices are going to keep going up for the next week or so.

2. Turn all the STEEM into SBD and sell when you believe you've hit a maximum or the amount that you need to pay out.

3. Turn all the SBD into STEEM and sell when you believe you've hit a maximum or the amount that you need ot pay out.

4. Turn everything into BTC (or your favourite altcoin) and HODL until the due date in the hope that that will rise more quickly than anything in the period.

5. Sell the STEEM and SBD for ££ as you receive it, accepting that the price will go up and down.

Maybe you can think of other options. Which one would you choose and why?

I think the reason it's difficult to think about is that you have three variables (SBD, STEEM, BTC) that are fairly independent of each other but are all equally uncertain. And the answers boil down, I think, to predictions about the market and then preferences about whether you try to convert between assets to take advantage of market movements or whether you just accept that the prices are uncertain and build in plenty of contingency.

But I come back to asking - Is there anything more to this than preference and prediction?

What do you think is the most rational way to deal with an issue like this, and why?

Happy brain-crunching!