I know nothing about software, programming... But I got a degree in Business Administration and an MSc in Economics. Economics is an area of great interest to me. So I started to think about this issue. There have been many posts around where people have been expressing fears that Steem whales are cashing out. The main downsides, in their perspectives, are:
- Drop in Steem price (due to the selling pressure)
- Big players selling is a bad sign
- Less commitment
I'd like to address these 3 points to minimize such fears. Most important, I would like to provide a different view on the issue, which is the most sustainable and accurate point of view in my opinion.
Why a drop in Steem price is not an issue?
A drop in Steem price may seem bad to everyone in the community who owns Steem tokens or Steem Power, since the estimated net worth of everyone would be lower. However, any drop in price is actually good for everyone who wants to increase its stake in Steem, since it will be done for a lower price. Take Warren Buffett as an example:
"Down days I like because we buy them cheaper."
He usually says he loves when companies he invested has a drop in prices, since he would be able to increase his stake paying less than he had paid in the past. In the long run, the price will be a number according to the value of Steem, regardless of whales (or anyone else) cashing out (or buying) in Aug 2016 (or any other month) or not. This is rather an opportunity, ceteris paribus, to buy cheaper and increase stake in Steem, if one believes in its value.
Is big players selling a bad sign?
Many people complain that they put much effort in a good post, get many upvotes, but still cannot make even $5 out of it. They say that what really matters, after all, is whether the whales upvote their post or not. When the majority of the Steem Power belongs to few people, there is a natural huge bias towards content related to their main interests. The more centralized Steem Power is, the poorer the rewards system is in distinguishing good content from bad content, as individual opinions would prevail over the average thinking. The more decentralized Steem Power is, the best for the dynamics of this platform, as less bias would exist. When big whales cash out, other players come into the game, and more decentralized Steem Power will be. If Steemit can achieve its potential in a more balanced condition, then it will be more valuable, and the price would actually rise in the medium term. Therefore, this is rather a good sign if someone is wanting to hold a stake in Steemit.
Will there be less commitment?
Commitment by such big whales do not depend on a huge financial commitment. Actually, I could go as far as to say it has nothing to do with money. Enterpreneurs are usually interested in accomplishment, and they treat their project as they do with their own children. Success does not necessarily mean financial gain. Actually, this is the least important factor.
So... What's the important question?
The real question is: do you believe Steemit is valuable? This is a hard and personal question. There are many other questions you need to answer first, before answering this important question. Let me help a bit:
- What is it full potential?
- What personal necessities does it fulfil?
- What personal desires does it fulfil?
- Are there growth opportunities?
- Is it difficult to imitate?
- Are there other threats?
- Is Steemit organized (ready/able to explore opportunities/capabilities when they occur)?
Forget short term inflows and outflows of resources, hypes, whales cashing out, short term trades and all other unimportant factors that people keep shouting about cryptos. They only blur our analysis. In order to make good investment decisions, we need to focus on the important questions that really drive the price in the medium and long term.