Why I sold my STEEM Dollars last night
I was planning to post this tomorrow, however as this is topical, I figured I’ll put it out today. Who knows what the price of STEEM Dollars (SBD) will be tomorrow!
My plan (since I missed my opportunity to sell my SBD for ridiculously cheap STEEM) was to hold my SBD. Just hold and take the interest. However the signs seemed right to sell my SBD at a healthy premium. So I followed my instinct and sold.
1. Financial sense
Since Poloniex started trading it, the BTC- SBD market has been irrational in my opinion. As I’ve pointed out previously,
Steem Dollars is pegged to the US Dollar thus should be more "stable" than STEEM.
No matter how well or how badly STEEM does, you can always exchange 1 STEEM Dollar for 1 US Dollars worth of STEEM.
An additional attraction to STEEM Dollars is that it paying out interest at 10% pa.
That’s it. SBD are not supposed to be anything more spectacular than that. It is supposed to be a solid, investment type currency. Any major deviation from the USD peg undermines SBD in my view. Whether that deviation means Authors get a premium or suffers a loss when converting. I can only speculate on what traders are playing out. I've long given up on trying to make sense of the crypto market! I just hope it isn’t an elaborate pump and dump or anything that will undermine confidence in the eco-system.
Anyway, it would take me over two years of holding SBD to the make 25-30% premium I got for selling last night, so I sold.
2. Security
Coupled with that, I've only just regained full control of my account. A big thank you to the Steemit team that made it happen. However should a hacker gain access to it again, it is my SBD that is most vulnerable. I do plan on holding SBD in the future. I think it should be great hedge against Bitcoin (and STEEM) volatility, once the current craziness dies down.
Once SBD pegs consistently to USD, with good liquidity, I’m in. It will be like my savings account, only it actually pays interest! There will however need to be a time delay option and withdrawal notifications implemented for me to keep a substantial amount of value in SBD.
3. The relunctant 'middleman'
Lastly, I've introduced a lot of people to Steemit. I'm fast becoming their 'go to guy' when it comes to withdrawing SBD and STEEM. As much as I try to preach about self-reliance, financial freedom, cutting out the middleman etc., they just want to see the pounds sterling in their account. No Bittrex. No Coinbase. No Circle Pay.
"Can I get the money now?" Is the most popullar question I hear, followed by, "I'll even pay you a commission."
Okay fair enough. Who am I to say "reinvest" one minute then "your axcount is hacked, that's crypto the next!" Getting the money in their pocket will grow confidence in the platform and help drive user adoption.
Having a float of Bitcoin and fiat at the ready means I can ensure friends and family I’ve introduced (and their extended network) can get their money immediately at a competitive rate. Leaving me to work with the market risk, until more efficient and user friendly payment processor are in place. Obviously this now means I need to look into the legal and tax ramifications (which I'm progressing), the unexpected premium from SBD will help fund.
Conclusion
I wish everyone buying SBD at these prices the best. Maybe they see an impeding collapse in the price of Bitcoin and view SBD as a better hedge that USD. I just hope no-one gets burned. I’d advise anyone who is just piling onto the SBD gravy train to do their own research.
As always this is not investment advice… just an explanation of why I sold my STEEM dollars.
THIS IS EXACTLY WHAT WAS IN MY MIND. I made a nice profit and slept like a baby knowing that there isn't as much to steal anymore.
That's a clever move for those who earn good money here on steemit :)
Thanks for this post I will keep that strategy in mind if i ever become rich enough to use it. I suppose you must set a limit on how many steem dollars you are going to hold. what would your limit be?
I like the flexibility in being able to hold power or SBD. There are many people who cleaned up nicely recently but I'm a believe in Steempower:)
I just invest my steem dollars. Think thats not a bad idea.
Thanks for the advise though.
STEEM Dollars were heading towards the 2 dollar mark at one point yesterday. Crazy!
I started this exploration with an amount of bitcoin I was willing to risk. I then played the market just a bit to ensure the round-robin cycle to Bittex made sense to me. I was trying to decide what to do last night as well and ended up buying Steem on the internal market and powering up. The price may have been a bit high as far as Steem goes, but I liked the idea of keeping it in the Steem economy instead of pushing it back out to BTC. That said, if I had just held SBD until the price came back down and bought then, I would have had the added benefit of interest on my SBD and a better price for STEEM. Then again, by waiting I'm missing out on increasing my VESTS to take a larger portion of the new Steem being given out. It's funny how either direction can be argued if you want to stay within the Steem ecosystem.
I'm worried about this also. Especially for my friends who may want to invest.
Thanks for sharing, I will keep this in mind friend, cheers !