With all the great attention Steemit is getting, why is the price going down?
Steemit has been getting a ton of attention recently. Lots of famous people inside and outside the Bitcoin community have been making posts that are reaching millions of people. Within the last week, we had @brendazambrano, a Playmate model with over a million followers join up and send out a Facebook post to all of her followers. @dollarvigilante, who has a huge following in the cryptocurrency/alternate-coin communities, wrote an excellent post How I Made $15,000 in 12 Hours, including an awesome video interview with Steemit's founders @dan and @ned, which drew a ton of attention! Steemit was also just written about in the Huffington Post, thanks to @oliverb, which is just one of the many positive news articles that have been written about Steemit recently.
People are definitely starting to notice! There are a lot of great articles talking about how Steemit is blowing up. @masteryoda just wrote a trending post a few hours ago about how Steemit is going viral! @stylo just posted that we recently passed 50,000 users, and a few days ago showed how we are starting to pass Reddit in a lot of measurements of user engagement! Even within the community, @liberosist reports that Steemit is becoming more democratic, diverse and equal, which is a good trend to support the community's growth. The Steem Statistics Report by @hisnameisolllie does a great analysis of the Steemit numbers and trends, and shows that Steemit is definitely heading in the right direction!
With all of the attention Steemit is getting, and all signs pointing to Steemit taking off, it is no wonder that most people that are posting are bullish on Steem! @domavila is very bullish in the article STEEM/BTC Long on Poloniex - Triple bottom and bullish divergence - Time to Buy. The STEEM/BTC Daily analysis by @ozchartart is a fairly neutral analysis, which does a good job just presenting the data and remaining neutral, although if I read into the data that is being presented - it seems to be slightly hinting at a bullish direction. @jl777 recently put his (or her?) money where his (or her) mouth is, and invested 100 BTC into Steem!
That leads me to the question of my post - With all the great attention Steemit is getting, why is the price going down? Why aren't we seeing tons of new investors jump in to grab up Steem before the price takes off?
there was a rise of about 17% in liquid steem the last week. meaning more whales are powering down. hence the supply is higher.
Yeah, but remember that only 1% of total amount of steem can be withdrawn per week at max. I think we are still at around 70-80% of accounts that haven't powered down. With Steemit going mainstream and the amount of new users joining daily its just a matter of time until demand will overcome the supply and price will pick up again.
Most of the new users that are joining though are joining to post content, make money for their post, and cash out for USD. (I don't expect most of the new users will be powering up their Steem after they write a $1,000 blog article.) Won't this actually generate an increased supply rather than an increased demand? @dogguy wrote about this in an article yesterday.
a lot of content writers have been burned by pay for content sites , so withdrawing at the earliest possible opportunity has been the general rule of thumb for most of us for a long time. Saying that having seen a lot of sites fail i do think steemit has addressed a lot of issues that all those sites had in common so hopefully this will change as confidence grows.
@timcliff I have developed a strategy where: I will power up with 1/3 or my earnings, use 1/3 of my earnings for trading steem on the open markets and cash out 1/3. Also, I invested BTC in some steam power and bought some steem here and on poloniex as well.
@contentjunkie My strategy involves mostly trading steem and having some steem power for the long haul. If I make some for content creation that is a very nice bonus.
Is mining steem part of your strategy or just content creation?
Doesn't that mean that we will see this have an effect for the next two years?
The dilution rate on Steem is absolutely huge right now. Almost 1% per day. That's inevitably a lot of sell pressure at all times.
The dilution is just going to continue though. Won't that just keep putting more downward pressure on the price?
There will always be lots of sell pressure on liquid Steem yes, but the long term dilution rate is 0.19% per day, ie. 1/5 what it is today.
I think an important thing to realize is that there are those who use STEEM and SP for the actual use of the website. Then there are those who simply day-trade STEEM on Poloniex or Bittrex (or where ever) simply for the profits. STEEM went parabolic only 5 weeks ago (around July 5th) and there were a lot of people who bought in at prices significantly less than were it is today. There are still a lot of people who are holding STEEM and could sell for huge profits today that aren't even using the site, don't care about adoption and will sell out whenever the time feels right. That's just part of the crypto game.