In the last few days the price for one STEEM has soared from almost zero to 2.95 USD. So one might ask if STEEM is already overvalued and falling prices are almost certain. To get a moderate answer and a bigger picture of the situation, we will look at other big cryptocurrencies to derive three scenarios and their probability of occurrence.
In the chart we see Litecoin and Ethereum as the two biggest cryptocurrencies after Bitcoin. Litecoin rose sharply in the first 100 days after listing on an exchange and dropped down later to a moderate level. In contrast Ethereum remained at low levels for the first 150 days and then exploded for the next 150 days.
Given these two trends, how will STEEM develop after its fulminant start? It depends on the development/growth of Steem and the market conditions. Therefore three scenarios can be assessed, which have different probabilities of occurrence:
- Steem explodes in terms of users and fame. Many startups integrate Steem to reward their users for their contribution. It’s the new state-of-the-art model. In this scenario STEEM will skyrocket. When it`s a short-term hype, we will see a similar price chart as Litecoin. When Steem succeeds in implementing their idea of rewarding users long-term, it has far more potential than the pioneer and market leader Bitcoin (see chart).
At this point this scenario seems pretty realistic. When we look at growth rates and the price development in the past, STEEM has an estimated chance of 40 % for this scenario to happen. - The growth of Steem is only moderate in the beginning, the new model of Steem needs time to get accepted. There are only few startups using the Steem system. But in the end Steem gets increasingly popular. This circumstances suggest a price chart like Ethereum. Because of steems new concept and the sluggish acceptance of standard users in terms of new systems this is the most probable scenario with a 50 % chance to occur.
- Steem fails to attract more people to use it and there are no reasonable startups integrating Steem. Therefore, Steem and STEEM aren’t accepted. This scenario suggests moderate or even falling STEEM prices. With the enormous growth rates of Steem the probability of this scenario is fairly low, round about 10 %.
In summary, the three scenarios and their probability suggest that a short to medium term investment has a lot of potential considering the price development of Litecoin and Ethereum. But there are also risks. High volatility in the STEEM pricing and a failure of Steem and STEEM make an investment highly risky. So an investment is recommended for people who want high profit and are therefore willing to accept risk.
For all other users it’s a great chance to contribute in the Steem community. That’s the advantage of STEEM: You can earn them and be a part of the success story of STEEM without any capital requirements. So let’s do it …
I hope you liked the article. If you have any questions or discussions, I will try to answer them as fast as possible. Critics, comments, advices ... are always welcome. Feedback would be great for my next articles.
Bonus content:
Why a comparison to other crypto currencies is more effective than technical analysis: Technical analysis fails when there are high expectations/emotions in the market, when the market is illiquid and when there is almost no algorithm trading. All three points fit to STEEM trading. So a comparison with other crypto currencies is more useful in the case of STEEM.
About me: I’m a German master student in business administration with focus on finance and will found a software company soon. I’m interested in all kinds of startups and therefore Steem is a great platform spreading new ideas in the world.
Disclaimer/Important legal information: This publication is for information purposes only and does not constitute a request or an offer or a recommendation to buy or sell investment instruments, or to conclude any other transaction.