One year ago I stumbled upon a fairly new blockchain project. It was called Steemit and it was going to change the world.
I began reading everything I could about it. A decentralized social media they said. I liked the sound of that.
There was just one problem: Steemit had some confusing economics. There was something about three coins that I couldn't understand. You see, I'm not a math, a science, or a tech. Rather I'm an art and a history. These complicated blockchain gizmos confuse me.
I scratched my head and with my limited brain cells, the best I could come up with was this: There was Steemit, which was an onboarding currency. Then there was Steem Power which was a voting rights thing. Lastly, there was Steem Dollars, which was a currency …show more content…
The currency that was designed to be worth $1 was worth $14. What kind of nicompoop would buy at $14? They must be out of their mind. What are they doing with it? Powering up? Are they crazy?
It kept rising and I resigned myself to the fact that maybe I was the nincompoop and they were the smart ones.
Enter Reality
What we now know about these crypto coins is their price fluctuations happen in unison (for the most part). When the market goes up, they all go up, and when it goes down, they all go down.
The SBD is no different. When the market began to correct earlier this year, the inflated SBD came tumbling down along with everything else. At the time of writing, it sits at $1.49, a long way away from its high, but tantalizingly close to the $1 it's supposed to be at under normal conditions.
One could say, when the price surged over the $1 peg, it was irrational exuberance that caused the rise and the peg to break.
Couldn't one also say that if the price was to fall to $1 again, that would indicate irrational exuberance has left the market and thus prices have returned to normal again?
Can the SBD Signal When the Crypto Markets Have Bottomed …show more content…
Remember, I'm not a math, science, or a tech. I'm fairly sure I'm wrong. However, perhaps there is person smarter than me out their in blockchain land that could enlighten me.
My hypothesis is based on the answers (of which I don't know) to these three questions:
1) In the event that prices continue to fall and the SBD returns to $1, as long as another massive bull run doesn't occur immediately after, would the peg kick in again and start working normally as it used to?
2) If the peg did start to work correctly again, and knowing that the entire crypto market moves in unison, wouldn't that indicate that the market has returned to normal and thus reached a bottom? Couldn't we then be confident then that the bear market is over?
3) Considering that the broken peg was an accurate indicator that the market was going crazy, what would it mean if the SBD dropped below $1? If the SBD fell below $1, couldn't we say that the crypto market is irrationally oversold? Wouldn't that mean that a degenerate gambler, sorry I mean savvy tech investor, could place a bet, sorry I mean invest in cryptocurrency confident in the knowledge that the odds are on their side?
AM I CORRECT?
OR
DID I JUST INVENT A NEW NOVEL WAY TO READ TEA
I began reading everything I could about it. A decentralized social media they said. I liked the sound of that.
There was just one problem: Steemit had some confusing economics. There was something about three coins that I couldn't understand. You see, I'm not a math, a science, or a tech. Rather I'm an art and a history. These complicated blockchain gizmos confuse me.
I scratched my head and with my limited brain cells, the best I could come up with was this: There was Steemit, which was an onboarding currency. Then there was Steem Power which was a voting rights thing. Lastly, there was Steem Dollars, which was a currency …show more content…
The currency that was designed to be worth $1 was worth $14. What kind of nicompoop would buy at $14? They must be out of their mind. What are they doing with it? Powering up? Are they crazy?
It kept rising and I resigned myself to the fact that maybe I was the nincompoop and they were the smart ones.
Enter Reality
What we now know about these crypto coins is their price fluctuations happen in unison (for the most part). When the market goes up, they all go up, and when it goes down, they all go down.
The SBD is no different. When the market began to correct earlier this year, the inflated SBD came tumbling down along with everything else. At the time of writing, it sits at $1.49, a long way away from its high, but tantalizingly close to the $1 it's supposed to be at under normal conditions.
One could say, when the price surged over the $1 peg, it was irrational exuberance that caused the rise and the peg to break.
Couldn't one also say that if the price was to fall to $1 again, that would indicate irrational exuberance has left the market and thus prices have returned to normal again?
Can the SBD Signal When the Crypto Markets Have Bottomed …show more content…
Remember, I'm not a math, science, or a tech. I'm fairly sure I'm wrong. However, perhaps there is person smarter than me out their in blockchain land that could enlighten me.
My hypothesis is based on the answers (of which I don't know) to these three questions:
1) In the event that prices continue to fall and the SBD returns to $1, as long as another massive bull run doesn't occur immediately after, would the peg kick in again and start working normally as it used to?
2) If the peg did start to work correctly again, and knowing that the entire crypto market moves in unison, wouldn't that indicate that the market has returned to normal and thus reached a bottom? Couldn't we then be confident then that the bear market is over?
3) Considering that the broken peg was an accurate indicator that the market was going crazy, what would it mean if the SBD dropped below $1? If the SBD fell below $1, couldn't we say that the crypto market is irrationally oversold? Wouldn't that mean that a degenerate gambler, sorry I mean savvy tech investor, could place a bet, sorry I mean invest in cryptocurrency confident in the knowledge that the odds are on their side?
AM I CORRECT?
OR
DID I JUST INVENT A NEW NOVEL WAY TO READ TEA