Toss Out the Steem Fundamentals?
I have seen since I have first arrived here so many charts concerning steem and think we as a platform have it totally wrong if that is what we are focused on when we are buying it. What I am about to say is financially blasphemy next (trigger warning-you have been warned, read the entire context before you comment please)... The price of steem day to day likely doesn't matter either.
We have been so geared up on fundamentals, but think about how you use your steem when you buy it. Does it instantly get powered up? Is it used as an exchange for something you want on steemit, or now within one of the new condensers? Is it bought to trade similar to a commodity while keeping it liquid within your account? If you are in the powering up crowd congrats, you in select company, that is not a chief usage of steem at the moment I can promise you that. If you are flipping steem and attempting to day trade it, best of luck at catching that falling knife. Odds are fairly overwhelming in my opinion and especially in my anecdotal experience that steem is being bought as a means of exchange to buy some other desired outcome somewhere on the steemit platform in one way or another.
I personally have spent quite a bit of my steem on steemmonters cards over the past several months. The steem hits my account and leaves like "a hot potato" leaping into the person who is holding the cards I want to buy, or whether it be steemmonsters themselves, or whether it be another market that has something steemmonsters related that I want to buy. That without question has been my number expenditure on the platform. I personally invest very little in other cryptos as I like to limit it to what I know and follow daily.
So, question. If you buy something on steemit, to use the monster cards for example do you consider the price of steem before you buy? To further explain the question, do you consider what steem has done relative lately in its value and weigh that in your purchase? Me, yes to a point but very often, "not necessarily." I want splinterlands/SM cards, not steem but I am forced to use steem as the medium of exchange to accomplish my goal. When I am bringing in fiat it really doesn't matter. Steem traded based on fiat matters, fiat traded based on steem doesn't necessarily matter--that being for the buyer.
If I want lets say a gold foil beta card of a Pit Ogre, and it's priced relatively low at let's say $3.10. If I don't have the liquid steem I would likely pick it up with fiat when available, so it's the same $3.10 that the price tag says. So I have gone out, got the steem to pick up the card. If steem were $1.55 would I still buy steem to pick up the card--yes very likely, that is an exaggerated situation because of the relative price but I am not mailing someone a check for $3.10 or sending actual cash through the mail but buying it with steem and if steem were that high then I would of course buy steem and use it to buy that card.
The holder of that card is getting my steem, as represented by cash at that moment. Just because there is a fall in steem price doesn't mean the steem based economy is poor, it means that mass quantities are leaving for other means of exchange yes, but it doesn't mean the fiat that is coming in is necessarily leaving as fast as the steem is being cashed out, in the long term I mean. In the short term yes, but in the long term those that stick around are being given a golden opportunity to accumulate this at a comically low price to BTC as it has been priced historically.
The day to day movements in the charts, the psychological landmarks that are hit are far less important than the actual narrative of what is going on within the economy, what is being developed and how are its prospects and current returns at the moment in how they are being received. In going off of this steem is drastically oversold at the moment, especially with it being currently "the reserve currency" for all of the alt coins and sidechains that are popping up and the level of excitement they are creating at the moment.
All of this above narrative is a simple explanation to I suppose justify that even if the price of steem is falling, that is bad news for those that soon will want out of the economy or the usage of the steem itself. But for those that are long to the platform and especially the new dynamic micro economies that are popping up like hotcakes then it's not necessarily a bad thing at all--in fact it can be a great positive.
Weaker hands are headed for the exits, that is for sure on a routine basis now and for a long time. I am guessing that these people are heavily made up of larger holders that use this in a series of different ways. Yes the volume of steem being bought is fairly low at the moment, but if it continues I personally feel that the momentum over time is going to hit those that follow this far less closely but is newer to the crypto for whatever their reason. The hype with the altcoins in all of crypto, especially steem is seemingly unable to keep up with the news for stable coins let alone an alt like steem that has seen a drastic drop in market cap over the past several months.
In summary, in my humble opinion, market makers aren't staring at their computer screens to buy steem because it's reached a certain point of resistance, or selling for that matter for the same reason, but are doing it much more for their personal situation at the time due to a narrative that they have already made up their mind as being true to them or not. The real bounce up is going to come as a shock, as a one day pop, then another day, a string of these, not up a tenth of a point here, a point there, 2 points another day, and so on.
This of course is my opinion and as a very contrarian style reader of the markets I suggest you take the information for what it's worth as unsolicited free advice. Use a professional for serious decisions and consider this one tiny piece of the puzzle (at best) of the reasons to do anything as I am not here to provide professional investment advice but to entertain through careful observation. Best of luck and enjoy your crypto experience however it may be treating you!
Interesting read on the economics of purchasing playing cards. As long as you are enjoying this hobby and not taking it too seriously as an investment, you are almost guaranteed to come out a winner!
Hey thanks for the read @financialadvice. Funny thing is it locked in a lot of value for me. I was powering down when all of that started and steem was way the heck higher than it is now, I think it was still over a buck actually at the time. I was buying cheap original alpha cards with the steem that was powering down and flipping them once there was a market set up. I was making the tiniest of margins for quite a long time as cards were having their fad periods I would sell into the highs and buy as much as I could that was undervalued. I actually turned not quite a thousand steem into about half of what my collection is today, and it's valued around $7k based on the internal market values of the game. So it was a combination of getting very lucky and timing I suppose. Oh and of course being too stubborn to quit buying them and flipping even when it appeared like it was stalling out a few brief periods.
Great story, here's a piece of financial advice. Take out at least your original investment if you haven't done so ready. No one brags about how they were once a beeniebaby millionaire.
Steem is now at $0.29 it's a crap of a company that gets nothing done and is now screwing people over to finally "maybe do something"
I hope I didn't come off as toeing the company in this post because that surely what I was not after @bitcoinflood, because that could not be further from the truth. I am of the rise of the phoenix from the ashes type of optimist. Not much I can disagree with your comment of course.