Long-term and Speculative bets on Steem blockchain: Can there be two winners???
As most of you know, I am quite a philosopher and self proclaim data scientist. I enjoy putting a thesis on the table and speculating on the results base on the information at hand. The Steem blockchain remains one of my fascination within the cryptocurrency world, its a great concept and an amazing blockchain. Over the last couple days following the release of SMT dates from Steemit team, I had the opportunity of looking at some of reactions to blog and subsequent price action of Steem and SBD. There has been some disappointment base on the timeline given and excitement by others who now have a timeline to work with. The question I ask myself, can responses be enough to identify the speculators from the long-term investors? Interestingly, the Steem blockchain is going through an interesting phase where continuous decline of the Steem token has led to temporary pause of SBD printing. This has led to increase in the amount of Steem printed to payout to users on the platform. There are some interesting blogs covering the mechanics and dynamics of Steem blockchain and if you want to understand the system better, you should probably look these up. Lets look at chart from CoinMarketCap and probe through the questions above.
I have taken out the last three months of Steem BTC chart as the Steem price vs BTC has plummeted and given Steem usage compared to other blockchain it does not reflect true value. Depending on the chart philosophy you subscribe to, this Steem chart can look extremely attractive as on can say its showing signs of rounding bottom and the risk/ reward is extremely good and one can expect good returns. Other traders may stay away pointing out the persistent trend and trendline. Both school of thought comes from a perspective, one can say Long-term vs Short-term. According to Maggio et al. (2013), who wrote Market Turmoil and Destabilizing Speculation, Long-term investors offer a downward-sloping demand curve to other market participants, whereas speculators trade off the cash flow from holding the asset against the expected capital gains from aggressively exploiting temporary deviations of the price from the long-term value of the asset. Another factor to add to the spin of chart performance is the flow of money, by that I mean, are the speculators coming back. Value and fundamentals cannot be ignored and whenever the distort both long-term and speculators often agree. If these speculators are coming back to the table, then its speaks well as the trading volume of Steem brings liquidity for daily bloggers wishing to cash out and entice momentum traders to take risk as Steem maintains healthy volume.
Can there be two winners
Steem has enough ingredients to pull it off, the concept sells itself but sentiment is a concern. We now have a timeline to work with for the much anticipated SMT, what is needed now is a sentiment boost around the platform. Steem definitely needs the volumes from the Asian markets and a continuous upward growth curve. The market needs something to talk about, there needs to be active engagement on reddit and twitter. Greater use of Steemit twitter profile, sharing some statistics as often as possible, keep the audience engage. Highlight the diversity of topics covered and ensure how varying topics are rewarded. The Steem chart also needs a construction, having a market maker should be considered an asset, it all helps with overall boost of sentiment around the platform. As the overall market sentiment improves, we have to see how Steem and SBD performs, can we see a boost in fortunes. I believe both Long-term and speculators can find their place within the ecosystem and coexist.