My Thoughts on STEEM/SBD and What I'm Doing With My Payouts
Hey everyone! I've gotten a lot of questions about SBD and STEEM and what I expect in 2018, here's a short post on my thoughts regarding the price of SBD and STEEM and what I'm doing with my payouts right now.
As you've noticed, the price of SBD is high and it's allowing every author on Steemit to earn massive rewards and either power up or diversify into other cryptos or fiat.
Do I think the price of SBD will go up?
If you look at the fundamentals of SBD and STEEM, it's clear that they are supposed to move inversely. As the price of STEEM goes up, the payouts on Steemit get larger and therefore, more SBD needs to be printed in order to pay authors.
As SBDs are printed, the number of SBDs in circulation increase and thus, should dilute the overall price of SBD. This is contrary to what we have seen over the past several weeks - the price of STEEM has risen and the price of SBDs somehow continues to stay high.
What this tells me is that there are a number of people who are continuing to buy/hodl SBDs in hopes that the price spikes back up to $18. Fundamentally, this would be a bad tactic, but you have to keep in mind that SBD is a cryptocurrency! Cryptocurrency price movements do not always reflect fundamentals (in fact, the majority of crypto price movements have nothing to do with fundamentals!!).
There's also been a lot of speculation that there are several large investors who are utilizing the low supply of SBDs in order to pump the price and make a profit by dumping massive amounts of money into SBDs. This is definitely in the realm of possibility, but I have no way of confirming it.
Do I think the price of STEEM will go up in 2018?
I think 2018 will be a huge year for STEEM. Here's a few quick reasons why:
- HF20 will be released
- SMTs will be released
- STEEM is fundamentally the best blockchain (in my, and many others' opinions)
- Steemit has seen explosive growth and it is continuing into 2018!
- The STEEM community has a vested interest in the growth of the platform and we are all working as hard as we can to make it better for everyone!
- The Snowball Effect - Steemians are obsessed with getting their friends on board (I know you've told at least 1 person about your excitement for this platform. I've told everyone I know and many have signed up as a direct result! Steemit is growing like wildfire and its mainly by word of mouth from fellow steemians!!! Keep up the good work!).
What am I doing with my SBDs?
Because I can't really make a concrete prediction about the price of SBD, I've been selling roughly half of my SBDs as I receive payouts. It's a kind of middle road that makes me the most comfortable during these volatile market movements.
I've been using the income from these SBDs to do 3 things:
- Buy Steem and Power Up
- Diversify into other cryptos
- Diversify into fiat investments
If you go to the internal STEEM market, then you can find the ratio of SBD/STEEM, I try to time my trading of SBD for STEEM when this ratio is peaking at its 7 day average.
I diversify into other cryptos if the ratio of SBD/STEEM is too low and I spot a good buying opportunity in a particular project that I research and like.
I also participate in real estate development and investing and I diversify a portion of my earnings from crypto by purchasing land and investing in several real estate projects. I've considered starting a vlog series about my real estate projects, would you be interested in getting an inside look as to how I make money in real estate? Let me know in the comments!
Disclaimer: this is not financial advice. This is just one man's opinion, do your own research and seek professional financial advice before making investment decisions.
QOTD: What are you doing with your SBDs? Are you hodling against the fundamentals, deploying a middle of the road strategy like me or selling them as fast as you get them?
P.S. In case you missed it, TKC has moved back to the comments and QOTD! For the past week, we tried featuring authors but it turned into a beast that we didn't really enjoy handling. I miss the old days when we would have our discussions in the comments rather than accross a multitude of posts. I hope you also enjoy the new changes! Thank you for reading and supporting!
Don't forget to leave your thoughts below and I look forward to seeing you in the comments!
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You are like 5 steps ahead of me. I am always disappointed when I go to market and find steem prices getting close to SBD. Steem always seems expensive compared to even a couple weeks ago.
When I explained Steemit to a friend and showed him the wallet he asked why posts don't pay in Steem and just get rid of SBD altogether. He said it just makes things more complicated.
When I searched for SBD for USD in google I got information about the Solomon Island currency but nothing about the crypto.
Thanks to you @khaleelkazi and some other generous upvotes I finally have some SBD. Not only am I learning something new every day but I am earning SBD. Now a clear plan of action is necessary.
You give a great example of diversification. As I gain insight into the methods and markets I will diversify and consider cash investments as well. My next post will be similar about HODL nuts. I will let you know when it is finished.
Yeah, STEEM seems really expensive right now, but then again, so did Ethereum a month ago when it was around $400 and now look at the price! Betcha wish you could buy some Ethers at $400 (I know I do!). I think we'll look back at this moment and realize that we should've just dumped all our money into STEEM, but nobody can predict the future, so I think it's best to stay diversified and mitigate your risk. The SBD and STEEM have a necessary relationship economically that requires both to be used on the STEEM blockchain (at least to my understanding, please correct me if I'm wrong).
Thanks for sharing your post as well! I'll check it out soon and hope others do as well!
Steem has a bright future and will be around for the long term. This is a wonderful blockchain and can be super profitable... I hope we all crush 2018 and be 5 steps ahead of the game
Here is my opinion of HODL or FUD. Don't just HODL but prioritize what to HODL (nutashi sakamoto post) Good luck on your enterprise.
Each time I have SBD in my wallet there is this fear of loosing paraventure the price falls down. I have always traded SBD for steem and other crypto.
I will love to see some vlog about your real estate.
I agree @samiwhyte! I have a similar fear all the time about holding SBD, it's honestly more worth it to sell into other crypto or STEEM and wait for the price of those to go up. I hate that feeling of uncertainty over the market of SBDs. Thank you so much for your input on the real estate vlog, I think I'm gonna go ahead and do it when my newest project starts (should be next Monday)! I'm super excited to share this side of my life with all of you and I look forward to hearing your input as the project progresses and new projects begin!
Looking forward to the great project
Well thanks for sharing the details in an easy to understand format for a newbie like me, Khaleel. In the morning I was looking at the tkc digest and could not understand what you mean by going back to old days. Now i can sense that from this post.
I have just started to learn the platform and most things are new to me right from blockchain to crypto. I am currently working on to increase as much SP as possible by sharing more and more quality content on Steemit. Hence, I convert all the SBDs to Steem snd then power up 100% with them. I believe in the power of this platform and hence, do feel that best way to survive and improve and advance yourself in Steemit 2018 is to keep working hardand reach a target of asmuch SP as possible by the end of it. I honestly hope it will help me in long term than cashing out short gains.
Thanks for supporting the community @devilonwheels! I felt that going back to the comment style discussion was a much better way to engage with the community and encourage good content and good insights and from this post, I think I made the right choice! I hope you and the community agree with my decision and find more value in this post than in the curation posts! Please let me know more of your thoughts as this project continues! I love that you're continuing to power up and invest in the community, I think that it will pay off in spades for you. Having a long-term mindset like yours is the key to creating a real impact! Thank you!
O yeah !! When it comes to engagement, I do believe too that comments make a lot of difference. IT helps you build strong readership and community around it and I am sure will help the collective grow. On the other hand, it will help especially the newbies learn from these insightful articles if they decided to post some meaningful comment and get into the discussion. It brings a win-win situation IMHO. I am sure I am going to love it and will do share the feedback here or on Discord whatever I feel is going along or whatever needs some improvement/considerations.
I was also thinking that HODLING SBD is good but your logic is very genuine if price of steem is high then more sbd will print & price will go down. Its good to to power up & buy some other cryptos instead of holding them. Thanks very nice analysis.
Hey Vegeta what are you doing here? How's the tournament with Son Goku ?
Exactly! Thank you for your kind words and support @kartiksingh!!! I agree, it's good to diversify rather than blindly hold onto something that you can't really make a concrete prediction about!
I think this is one of your best posts! I look forward to the magical things Steemit has to offer this year.
I truly want to hear more about your real estate projects. Real estate fascinates me.
Currently I am working at getting the following before HODLing and SBD or Steem:
I will then return my focus on Steem and SBD.
Thanks @sequentialvibe! I really appreciate it! 2018 will truly be a magical year for Steemit and crypto as a whole! I also appreciate your input about the real estate, I'll surely start posting about it as soon as my next project starts (should be next Monday!!) Those are great goals! Smartcash is something I've been looking into and it recently pumped like crazy! Are you staking for the dividends each month or for the masternode?
It will be a great year indeed!
I am working to get 1,000 SMART to do the stake. Very few coins allow staking with a web wallet!
I can't wait to hear about the Real Estate and learn about it. I want to buy land and homestead someday soon!
While I agree with the fundamental analysis for Steem and Steemit, I kinda don't so much with your view on SBD. Imo there are two effects to that:
This is kind of a general pattern, but its economics obviously also depend on the amount of Steem and SBD out there as you mentioned. Therefore, the pretty much parity we've seen will surely not prevail forever...
Thanks for reading and sharing your views, I appreciate hearing your perspective.
I'm not entirely sure that the price of SBD front-runs STEEM. You do in fact generate more SBD from having a higher SP, and a rising SBD price will surely cause more people to want to power up and start posting. But, with more and more people powering up, it requires more and more SBD to be printed in order to pay those people. As the volume increases, it will cause downward pressure on the price of SBD. This should make the price go down, but SBD is being bought/hodled for some unknown reason.
Though you can generate STEEM from buying upvotes with SBD, you also earn 50% of that increased payout in SBD that also must be printed. Thus, causing the volume of SBDs to increase even further, which, under normal economic theory, should dilute the price of SBD.
Again, SBD is a crypto and despite all of these downward market pressures, it continues to have an elevated price. I'm not mad about it at all, in fact I wish the price of SBD would continue upwards as it allows myself and many other posters to power up more SP.
Thanks again for your perspective, it really is valuable and I hope to hear your perspective on my 2 points as well!
Great discussion, thanks for your reply!
Yes, I think we're also discussing short-term and long-term effects here. Short-term the dilution effect of SBD isn't as strong as e.g. the "soak" effect of new people coming and wanting SBD and Steem. Longer-term this will look differently, as you described.
However, I may adopt some of your payout-strategies once the amount I'm making becomes meaningful :-)
Hey @khaleelkazi !
I like your investing strategy.
1) Buy Steem and Power Up
2) Diversify into other cryptos
3) Diversify into fiat investments
Very diversified.
What cryptos are you invested in currently if I may ask? I personally have most of my holdings in KMD and NAGA.
Followed and liked.
Cheers!
Thank you for the kind words @vismonkey! I appreciate you reading the post! I haven't invested in KMD or NAGA, but will surely check them out!
My list of cryptos is pretty extensive and continually growing. I'll make a post tomorrow about the full portfolio, as its changed a lot in the last week! Here's a few that I just recently established positions in: SUB, NEBL, IOTA, DNT (this is not financial advice, just what I'm personally doing).
Thanks for the support!
Thanks for replying :)
IOTA and DNT are obvious ones, I am invested in them, smaller amounts though.
I'll do some research tonight on SUB and NEBL, see if I can diversify my portfolio a bit more.
Cheers @khaleelkazi
Of course! IOTA and DNT are super exciting but so are SUB and NEBL. SUB is very interesting especially now with the Net Neutrality laws as well! Let me know what you think of them, I'd love to hear your opinion!
Definitely like Substratum's idea of decentralizing the web. Didn't they do something similar in the show Silicon Valley?
They are a top 80 coin with a market cap of over USD $400M which is pretty respectable. I'll look at NEBL as well. Cheers!
Yeah its an amazing idea! I'm not sure about silicon valley, I only watched the first few episodes so far (ik, I'm slacking!). Cheers!
The best thing you can do is to take profits and continue to reinvest your money. Completely agree with what you are saying, I plan to diversify into various cryptos personally. Keep up the posts.
I totally agree! A lot of people are too afraid to take profits, but it’s just risk off the table and money that can be diversified into other assets! Thanks for your support @koldy!
Great post. I am relatively new and still trying to figure out how best to apportion my surprisingly large Steemit returns. It may seem like small potatoes to some but daily I am happily receiving about 1.5 SBD and 0.7 Steem: Somedays triple that. Suffice it to say I want to grow my account here and I love the platform, and foresee big things for Steem, and Steemit.
Anyways thanks for your views on how best to reinvest SBD.
Thanks! The returns on Steemit are so cool because they grow with compounded interest - the more you earn, the more SP you can get and the more you can earn on top of what you have already earned! It's an amazing platform and community and I'm glad to see that you like it as much as I do! Thanks for sharing your thoughts!
Thank you for your information as I am always wondering what is the better way Steem or SBDs!
STEEM is, in my opinion as well, a better investment than SBDs!
Thank you!