I'm seeing lots of talk about the fall in the price of STEEM and cyrptocurrency more generally.
Some are excited for the buying opportunity, some are nervous.
Which side is right? Like most real-world answers, it depends. Both have a point.
In the global financial scene, we are seeing a shift that we haven't seen in over a decade. Central banks are contracting the base money supply. The crash that people like me have been warning about for years is beginning. The bad news is that despite the focus on events like Black Monday, crashes actually take a while to happen. Your typical modern recession is about 2 years.
Right now we are just seeing marginal traders get called out. Those traders who were leveraging up their positions with margin debt are getting called by their brokers to either put up more cash or sell. Most of them don't have the cash, so they are selling, which increases the selling pressure on the next trader.
In that kind of environment, people tend to engage in the Flight to Safety. This means they sell their risky assets that are going to go down in the recession and buy less-risky assets that will hopefully not go down or stay the same. The usual beneficiaries of the Flight to Safety are the US Dollar and some government bonds. To a lesser degree, gold gets the safe haven bid.
So where does crypto fall in all this?
Sad to say, crypto is one of those risky assets that people (large traders especially) are selling to get their money out of. Why large traders especially? Because they are just trading crypto like any other financial asset. They aren't in it for the tech or for the future.
Those BTC fanyboys who say it's a store of value are wrong. At least today they are wrong. Maybe in the future when the crypto revolution becomes mainstream they will be right.
For myself, I am utterly convinced that crypto is a vastly superior technology to fiat for the need of a money. So I am a believer in the future. The question is how low will crypto, and STEEM specifically, go? It becomes a question of whether to catch a falling knife or potentially miss the bottom.
Where will the price bottom out? No idea!
When will the price bottom out? When the selling stops!
So what am I doing? Mostly buying SteemMonsters. #monsterbanking
I'll probably start buying STEEM for STEEM's sake in the new year.