Buying SBD with fiat a good idea?
Yesterday I bought some more SBD with Fiat (not other crypto).
The price of an SBD currently on the markets = $1.
I just can't find any flaw with this buy.
Unless the market cap of SBD reaches 10% of the market cap of STEEM it's possible to convert 1 SBD into $1 worth of STEEM.
It currently is around 5%.
It would mean STEEM needs to go to 50 cents before this is no longer possible. But even then you can just wait for more STEEM to be created until balance is restored and the conversion works again.
On the other side there are a lot of benefits though.
The biggest two being:
No real risk of of SBD going lower than $1 (Fiat investment stays the same).
Benefiting from a rise in crypto if that would happen. SBD has shown already that it goes up with the markets.
Also no SBD is printed right now so in a scenario where it would pump no one would be able to earn it (and sell it).
I therefor now think it's not a super bad idea to just keep a little SBD on the sideline, just in case.
What do you guys think?
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Greetings, Great Exyle
I think it is a good strategy for those who have "stopped money" to invest. Perhaps a pump can occur in the SBD as it has already occurred in times past and the person has a profit around 20 to 30% if they sell on time.
But is it really SBD it's not below 1 dollar??? If it does not stay, it is at 1 excellent time of purchase, since it is almost 100% pared with dollar.
Thank you and good afternoon!!!
The SBD is now less $1, and the convert SBD to Steem is already removed in the wallet, how do we convert the SBD that peg $1 to steem?
I'm currently running a test with this tool on my test account. Convert has started since yesterday. Know more in 2,5 days but I'm sure it's fine because I can see it in the blockchain.
Here is the original post: https://steemit.com/utopian-io/@mwfiae/new-project-sbd-converter
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You can also use CLI-wallet for those concerned about the security of their Active Key.
The command is convert_sbd username "1.000 SBD" true.
I put some conversions through when it dipped down to $0.95 today.
You can also check the sourcecode or trust @therealwolf about it. He does promote my tool sometimes and he is a well known witness and owner/maker of smartsteem :)
So probably the best sign of trust I can get :)
It's surprising how little convert is currently being used. Think they need to add it back to the interface ASAP or risk the whole pegging mechanism from collapsing due to the silly mistake of having convert removed from the user interface.
To be honest as long as a few people know about it, the pegging will work. :)
But yeah it is an advantage for the more techy/experiemced people, that's why I made the tool mentioned above :)
I don't see the upside potential, to be honest. With Tim Cliff's change to the print rate in HF20, I can't see speculators driving the price of SBD substantially above a dollar again.
Of course, I didn't foresee the intial SBD pump, so I've been wrong before :)
It will be interesting, with @timcliff's changes SBD indeed will still be printed at 9% market cap of STEEM but that's not now. HF20 is still 6 weeks away (or more) and right now it doesn't seem like a bad buy to put some fiat in.
Why do you think there is no risk of SBD going below $1? It has been as low as $0.60 in the past, and hard fork 20 is going to massively increase the potential supply.
Because I will be able to convert is to $1 STEEM. (unless SBD market cap reaches 10% STEEM marketcap).
Sure, but the conversion doesn't necessarily give you $1 worth of Steem. The conversion happens over a time period of 3.5 days, using the witness price feeds, and the actual amount can be less than $1 worth of Steem if the price has continued to drop during that time. It can also be more, but it's likely biased to the downside in a bear market.
The price of STEEM has to drop below 50 cents for that to happen. Can that happen in 3,5 days....I guess so when it's really volatile.....it can also fly up (but in that case, I'll be happy anyway).
Nothing is 100% certain but in general I don't think it's a bad buy.
I think on the markets SBD will trade for around $1 for now. If it goes to 60 cents....it be a steal.
You get less than $1 from a Steem Dollar conversion if the final price of Steem after the 3.5 days is below the median price of Steem during the 3.5 days. It doesn't have to drop below a specific amount.
I will be buying up SBD as they go below $1, but I don't think it's a risk-free trade.
which exchange or procedure to get the 1 SBD to 1 STEEM conversion? The internal market is not price guaranteed and blocktrades neither as far as i know? thanks
There is a transaction type which allows you to execute the Steem Dollar contract. It used to be available on the Steemit.com wallet page, but I believe you can only do it in the Command Line Client these days.
Ah... So we will need to test this first to see if it works as we speculate at this time. Thanks 👍😀
I've done the conversion probably 100 times. So I know that it works.
Yeah but I mean you say... It used to be.... but now it is only available I believe... so it means at this moment we have not used the available option for conversion and I don't know about a command line interface
I made an easy to use interface so you don't have to use command line interfaces :)
https://mwfiae.github.io/SbdConverter/
You can read more about it above ;)
I think the HF20 changes make a haircut on SBD conversion more likely.
The changes to the print limits will allow SBD to be printed all the way up to the 10% debt level cap. This makes it more likely that the 10% cap will be reached. It only needs SBD to be a little above $1 to make 50/50 rewards the better option and for SBD to keep being produced.
In market conditions similar to the ones we have just lived through we could find ourselves in a market where Steem is falling but the SBD conversion guarantee no longer holds. (Imagine if the debt cap was currently at the print limits of 5% for example).
Something I think people should be aware of if they are looking to hold or purchase SBD.
Great idea and if everything works like it’s supposed to, a fantastic long tail investment.
I’m looking at it all right now. SBD but also STEEM. these are the prices that you OG’s talked about and we (new steemians) thought we’d never see again....
time to stock up :)
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Good buy! Steem below 1 usd is a good buy too.
i think it's always a nice idea to have a bunch of SBD in case. my plan, 100 sbd just sitting there for christmas times :)
I am still HODL all my steem.
Sounds like a good plan to me @exyle although I'm struggling at the moment trying to buy euros then crypto from the UK.
I didn't make any notes about how to get sterling into my Revolut account so I can change it to Euros. Spent tons of time on it yesterday and asked a couple of people to look for me and they couldn't work it out either.
I've done it before though so I must be able to find the information somewhere. When I do you can sure, this time, I will make notes!
Or maybe I can buy SBD with Sterling somewhere? If anyone reading this is in the UK and knows how to do it. Please let me know. Ta!
This is a stumbling block for many. Bitcoin or BTC remains the entry point for other crypto currencies. You must first establish a Wallet to receive BTC. I use a hardware Wallet called Armory. But it doesn't work independently so you have to also install and run Bitcoin core wallet and once synchronized (this can take a day if you start fresh) you can start up Armory. Make certain you have enough space on your hard drive as this will end up occupying well in excess of 100GB. It is also possible to have an on line wallet, but they charge a fee and if they get compromised you go down with them.
I'm in the EU so I use Bitonic to buy BTC direct, without dollar conversion so I don't need a dollar account at my bank. A quick search produced the name of www.coindirect for a similar service providing BTC for GBP after the obligatory bank account verification etc. Still with me?
Once you have BTC in your wallet you can buy SBD or Steem from Blocktrades, ..if you don't make any mistakes. There are other ways to buy Steem or SBD, but this is the route I took and it may not be right for you or your situation.
What we really need is an exchange that trades fiat currencies direct for Steem; until that time Steem will always follow BTC in it's ups and downs. Hope this helps, greetings!
Thanks for your reply @onnovocks.
I know how to buy BTC and how to buy Steem or SBD via Blocktrades but @exyle said he was buying SBD with Fiat so that is what I was asking about.
Specifically how to buy SBD with Sterling, although I'm assuming I will probably have to convert to Euros first.
A fairly good Idea actually. It a no risk investment and the truth is that devs are in no hurry to peg the SBD. Only one way from here. Up!