Will Steem Dollars fall back to $1? If so, how will that effect user growth?
Steemit has been experiencing some serious user growth over that last couple months, in fact January was a record month for user growth. Check this out-https://steemit.com/steem/@honeydew2002/month-over-month-steem-steemit-stats-wow-2-million-transactions
Coincidentally Steem Dollars price exploded in value a couple months ago, are the two connected? I would say yes. SBD's were designed to act as a currency for the Steemit website and is supposed to be pegged to the USD. One Steem Dollar should be worth one USD but it trades on open markets like Bittrex and more importantly a South Korean exchange called Upbit. Upbit listed
Steem and SBD in late November, Steem Dollars exploded in value shortly after and Upbit is responsible for over 80% of the current SBD trading volume. Look at this chart showing SBD price right after its listing on Upbit(red oval).
South Koreans have pumped the price, pure speculation, but it has been in a steady decline since its peak on Dec 18th.
The high SBD price has directly effected the payout scale for posts on Steemit. Since the system recognizes SBD as one dollar it pays out the quantity of SBD to amount 50% of your payout accordingly. If your post is worth 10 bucks you'll receive 5 SBD at the payout rather than the market value of about one SBD, this gives the author triple the rewards than before the Upbit listing. Because of this everyone who's posting is receiving payouts in 50/50 SBD to Steem, which has inflated SBD supply 125% in the last two months. Check out this post for an in depth review of this. https://steemit.com/steem/@buggedout/steem-dollar-will-fall-to-usd1-usd-here-s-why
Steemit has added 250,000 new user accounts in the last 2 months, growing by a staggering 55%. So what are Steemians doing with their time? Here's a comparison of posts vs. votes.
Posts
Votes
You can see how posts continue to grow exponentially, while votes have flattened out. I think this is because of the SBD price and you have to post to earn them.
It looks like the pump in SBD has been a significant factor in Steemit's explosive user growth in the last 2 months. Thankfully Steem is also worth far more which directly relates to Steemit users making more money. I don't think SBD can maintain its premium price because of it's inflation rate. Steem currency has a bright future and will likely continue to rise, providing Steemians with a steady growth in income. If SBD does drop closer to its one USD peg, Steemit user growth will likely slow down. What do you guys think the effect will be?
G'day
Sources: @penguinpablo , coingecko
Good write-up honeydew. Will be very interesting to see where the value of the SBD goes in the future. One one hand it is meant to be valued at $1 USD like you mentioned. But on the other, it is also a trade-able commodity which seems to be a bit of a conflict of interests. As long as it's able to be bought and sold, the value will always fluctuate with supply and demand and whether or not investors see value. Will it ever settle at $1? I personally don't think so, as long as it's able to be bought and sold.
Nice artice! When I first joined steem, I didn’t know how important the SBD price was (or even that it usually didn’t track the dollar). It’s awesome to have people like you out there that analyze the growth of steem. Definitely upvoting and following!
@shredz7
Excellent info
Indeed excellent
How is that Possible
How is what possible?
Steem falling to 1$
SBD and STEEM price already equal.
The Steemit platform will adjust himself and continue to grow throughout the year of 2018.
The SBD is not pegged to the US Dollar. They only show for each crypto currency the actual worth in US-Dollars but it also could be shown in Euro for me in Germany. The value of the SBD is stabilizing around 5 Dollars recently and Steemit is climbing up the ladder in the coinmarketcap charts (today on place 25 and before not in the top 30). As steemit is a backed crypto currency its value will not decline as the value of the other worthless crypto currencies is declining. In the end only 3 to 5 cryptos will survive. Bitcoin and SBD will be two of it.
If it does, I'm cashing out all my crypto's and buying STEEM power ;)
Thank you for the writeup.. You even shed light on some things i do not know about..
Well analysed
Its unlikely mate we'd see SBD to $1, we'll i dont totally roll out the possibility but yea...As a matter of fact 1 SBD was pegged to 1 USD, it was to everyone's surprise that it went up as high as $14, those were crazy days. Thanks to Upbit but its still unclear to me and many other how could that volume affect SBD price.Its like pouring in $1B into tether & tether goes to $100, that doesn't happen though.
I believe Tether's supply and demand is minipulated to keep it pegged to 1$, while Steemit recognizes SBD as worth one dollar, it's not controlled so the free market has been determining it worth. The big thing here is SBD's huge inflation rate working against it.