That's simple. Every 48 hours STEEM adds around a million new coins to the total supply. Sometimes a bit more and sometimes a bit less. Either way it adds up to inflation.
Secondly, there is no demand on the open market for STEEM. The daily trading volume is extremely low averaging around $200 k per day. That is really low for a coin with a market cap over $100 million. Litecoin, a currency of similar market cap, sees an average daily trading volume of 1-3 million.
Sure, you could argue that we are still in beta and we need to wait and see what happens. I've made that argument in the past. I've also pointed out that we are on the tail end of a massive pump and the market is correcting.
One thing is clear, as long as the coin supply continues to grow at such an alarming rate, user sign up remains flat and trading volume is non-existent, we will continue to see a loss in value. I'm still excited to see where this platform goes, it is some of the most fun I've ever had on social media but we need to come back down to earth and evaluate the situation.
Share your thoughts. Leave a comment.
