Some days ago, we woke up to news of the free fall of the price of Steem. The trend had continued, increasing people’s heightened concerns.
In just a few days, the price of Steem had plummeted from over $4 to $1.12
The fall seems to have been triggered by the sudden collapse of Bitcoin which has fallen from an all-time high of $12,000 to about $6,000 in only a few weeks. And it seems the world has not seen the worst just yet. Some reports are predicting that the price collapse of Bitcoin would continue and that the price of Bitcoin could soon fall well before $4,000.
Some of the factors responsible for the ongoing free fall in the price Steem
1. Over speculation
Steem has witnessed a modest increase in its worth over the past few weeks, there was more demand for it pushing its market cap to over US$2 billion. Of course, many people bought new Steem only to sell, make profit and exit the market. The implication of this was a steady decrease in price as supply exceeded demand.
The price of Steem had steadily increased towards the end of 2017 before the sudden fall in price in Jan-Feb 2018
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From a high of one STEEM valued at US$4.07 (market cap of the coin at about US$1 billion), the price of Steem had plummeted to about $1.12.
2. Panic
As price of Bitcoin, the market leader in cryptocurrency continued to fall in the past few weeks, naturally, some of the concerns were transferred to other cryptocurrencies such as Steem. While Steem had largely been healthy in the past weeks, it is hope that it would shake off this devaluation and bounce back as soon as possible.
Should other cryptocurrencies like Steem be worried about Bticoin’s price collapse?
The answer is, No and Yes.
No.
Because the fall in price of Bitcoin is an opportunity for other cryptocurrencies like Steem to steadily increase their own market shares, and fill the void left by the shrinking Bitcoin.
Yes.
Because if other cryptocurrencies continue to make the same mistakes Bitcoin made, then, the same end result and fate of Bitcoin would definitely befall them.
3. Interference by external forces
Some are pointing fingers to interventions from external forces to the fall we are witnessing in the price of Steem.
For example, a platform called Poloniex disabled temporarily disabled STEEM and SBD deposits and withdrawals on June 6, 2017. A few days after that, we witnessed a significant drop in the price of STEEM. A conspiracy theory? Perhaps. The coincidence shouldn’t be waved off, some say.
4. Inherent flaws in the system
While it is a given that no human system is perfect, it is also true that unchecked flaws almost often lead to collapse or under-utilisation of any system.
Over the years, like any other system, some inherent flaws had been highlighted by industry watchers in the structure of Steemit. And yes, Steemit has since taken great steps to fix some of these problems, apparently, more still needs to be done.
One such flaw according to some is that due to the size of their Steem Power, whales overbearingly control distribution of coins as well as direction of content, thus, giving them an almost absolute power to push posts they favour to the top, with maximum Steem and Steem Dollars earnings, which they profit the most from.
In conclusion, pointers show that this dip in price was caused by external forces. In fact, as we type, there has been a shock on the international market resulting in sharp drops in the value of market stocks of various companies. Some in the US are beginning to point to some of President Trump’s volatile policies. How all of these turn out remains to be seen. But one thing remains sure, many agree that Steem remains a dependable and one of the most reliable cryptocurrency platforms.
You can count on it, Steem will weather the storm!
What other factors do you think could have been responsible for the fall in the prices of STEEM and SBD?
Image source: Google Images
