Steemit has now reached over 50 000 sign ups and we are noticing a decline in the price recently. Let me tell you why I believe this decline is just the direct result of the newcomers hype and why it will not continue that way for too long.
Steemit as a community knows how to have people interested and have them stay within the community. The more you steem the more you want to be able to provide "that quality article" that will propulse you to the first page of steemit. The more new sign ups we have the more of these users we are seeing, but among these users we will find big names joining steemit just like the DollarVigilante who was able to earn over 20 000$ in the past two days.
The Steem price is falling but this is not permanent
We have noticed the steemit price fall from the past few weeks and many factors could explain the reason of this price reduction. One of them is possibly because steem has risen so fast in the past few months and the market is now trying to find a neutral ground with those people cashing out some of their profits.
But this is not the main reason I believe. I strongly believe that steemit is still in a " prove yourself " phase. New bloggers who are winning big money right off the start are overexcited by the fact they have done so much money in such a little period of time. The only way for them to verify the legitimacy of the system is by cashing out their first earnings to actually feel that they really managed with a single post to win that much money. This is why the price is falling but here is why this is just temporary.
Steemit reward mostly newcomers and in a very handsome way. After these new members manage to turn their steems into Bitcoin and realize that steemit is the real deal, they rush back into posting content as fast as possible without really thinking of the good quality of their content. They realize very fast that they need to work hard for their steems and realize how important is the steempower on this platform.
When I first started steeming , I barely understood how the platform worked and what it meant to have steem power, so I cashed out my first earnings since I was exited about it. I realize the more we grow the userbase the more we see posts being paid less then the ones we have seen a few weeks ago and the more we see the rewards being spread over hundreds of different posts instead of sticking to a few dozens of them.
Diversifying the rewards
The diversity of the rewards is one of the reason why steem won't keep on falling the way it is. It is pretty simple, when someone earn big rewards, he obviously withdraw big amounts, and when comes to time to sell his steems he does it with a way bigger impact since he is selling a big chunk of coins all at once. Now spread this big chunk over 10 accounts who decides to sell their steem over different period of times and you will notice how stronger the market will look therefore will be an even more attractive market for those seeking to buy steems for steempower at the actual price.
A lot of people are taking off their buy orders because they realize the fast growth of steemit will result in a "dumping" phase, but I believe this is necessary in order to grow the platform. But, the more the platform grow the more we understand that we need steempower to stand out in the future of steemit. Right now with a few tens of thousands , our chances of being noticed are pretty good but won't be for long if steemit user base keep on growing that fast and millions of people end up posting. Millions of high quality writers are going to be taking over the platform and you'd wish you had stacked on your steempower sooner!