Why STEEM is undervalued with respect to supply:

One of the leading factors of cryptocurrency price is supply. Supply and Demand tend to dictate price. When a currency is limited in supply (like Bitcoin), demand for the currency drives the price up until demand is limited.

STEEM supply may seem average compared to other coins, but there is something different with STEEM. The actual liquid supply is incredibly limited.

• Current Supply of STEEM is 266,473,253
• Current Liquid Supply of STEEM is 76,677,601

Where is most of the supply locked up?

In Steem Power. Actual people have invested and stored STEEM in the form of Steam Power which limits the useable supply. These people realize the value of STEEM and how much earning power it has. What I notice is that many people here on Steemit don’t fully appreciate the earning power that investing in STEEM has.

Once people realize the return on investment potential with STEEM, people will drive demand up for STEEM as it will become a limited resource. For instance, leasing out Voting Power will provide returns on STEEM investment of 10% to 25%. Using Voting Power can bring even higher returns. This is much greater than most other investments. This is a little known secret the world has yet to learn.

Here is a comparison of other similar currencies that are organized by supply. You will notice I have added Liquid STEEM supply to the chart to accurately show where STEEM should be.

In this chart, the same currencies are compared by price. You will see Ethereum and Bitcoin Cash are out of family. You will also notice the liquid supply of STEEM, it is out of family.

In this chart, I have removed the outliers Ethereum and Bitcoin Cash which gives us a more conservable evaluation. You see that the total supply of STEEM appears to fit normally in the price range. Liquid STEEM at today’s price is clearly an outlier. However, by adding the price of $109 to the chart for the Liquid STEEM, it now fits.

Increased Users will Decrease the Supply:

There are several Apps using STEEM platform. Examples are Steemit, Dtube, Zappl, Busy, and others. Imagine if the combined use of all these current and future Apps eventually exceeds the amount of Reddit users which is very realistic. If I compare today’s Monthly Active Users (MAU) with Reddit’s MAU, STEEM App users will need to increase over 100 times. Currently, the amount of STEEM locked away is in Steem Power is 189,798,652. To keep the price of STEEM low while users grow, there would need to be 70 times more STEEM. This would equate to almost 19 Billion STEEM needed. The reality is that 19 Billion STEEM is not available or even close given the rate that STEEM is being created. Demand will soar dramatically as STEEM Aps grow in popularity and more Aps are crated.

In Conclusion:

Price of STEEM is influenced by market pressure. What the currency traders don’t realize is the rarity of STEEM. Sure, we may see more lows in the near future in this bear market, but eventually, the supply will get extremely low while Steemit, Busy, and other App users will increase. This alone could drive the price well beyond the $109 evaluation based upon Liquid supply.

I hope you enjoyed reading my Blog. Please remember to Upvote, Resteem, and Follow. Thank you.

---------------------------------------

For a breakdown of how Steemit Rewards system works:

https://steemit.com/steemit/@socky/steemit-rewards-breakdown-a-simplified-explanation-with-illustrations