RE: Post-Hardfork Steem - Calm Before the Storm?
IMO, the limited effect on price due to HF16 is a little bit managed by the largest stakeholders, but only a very little bit
It is more than a little managed that ned and dan stopped powering down. They are the largest stakeholders. Others in the dev team are very large stakeholders and have stopped powering down to (I don't know how 'managed' that is, but ned and dan are plenty to describe the situation as managed).
The platform can't work until theres better distribution, and there can't be better distribution unless the price goes way down. Its simply not worth it, at this point, for someone to go out of pocket to become a major stakeholder.
This cuts both ways. To achieve this sort of distribution you also need selling and at very low prices it may not be worth selling for the largest stakeholders. All told I think you get much better redistribution at high prices with high demand than low prices with low demand. Of course, that isn't something you can choose.
If no one sees the point of selling below 5 cents or 10 cents or whatever, then the price won't go lower than that and you can absolutely hold the line and maintain price.
If almost no one sees the point, then you'll see precisely what you are describing. Sluggish volume and a relatively gradual downward trend.
That is to say, whales can build a dam of 10 cent asks or 5 cent asks or whatever, and refuse to sell below that level. But the dam will leak when as little guys pop up and want cash now and just accept the highest available bid (or pop up on the ask side and front run the whales). My gut tells me the system is too big to do anything about that leak. I don't see it being feasible to convince everyone to stop selling, or even almost everyone.
There are enough people on the platform that need the money (or are just willing to take the highest price they can get regardless) so that the volume that trickles past is what is going to move the price point. IN a low demand environment where 95% of the money isnt moving because the major holders don't want to sell, the market price is going to be set by the 5 percent who are selling.
You have a point though that there comes a point where its no longer worthwhile for the little guys to sell either, at a certain price point what they would get from selling their relatively small powerdowns and rewards is too trivial to be worth the effort. Or, to phrase it a little more positively, the upside potential of a rally far outweighs the immediate rewards of cashing out.
Its kind of chicken and egg. To get high prices and high demand, there needs to be a significant level of growth. And to get significant growth there has to be better distribution. Though, both of the previous two statements are purely my subjective opinion. Im sure there are many who would argue that we can have high prices and high demand with the current size of the ecosystem just due to market speculation.
The price would not trend lower if the small number of people who do continue to sell are matched by a small number of people who continue to buy. This would be low-volume constant (or nearly-constant) price and exactly what you see for a large number of 'zombie coins".
The point is not that volume would drop to zero, but the little guys or occasional whale towel thrown in, along with the usual trickle (e.g. from rewards) are not enough volume to accomplish distribution on a useful timescale. (And to the extent that it does, as I mentioned earlier, it will likely distribute coins to a small number of buyers, not a large number; in a low-volume, low-price environment, where would a large number of people with an interest in buying come from? Nowhere.)
Then IMO it is probably a good idea to just give up and conclude that launching in the manner this was launched was a fatal error, with one caveat. I don't see lower prices, or even reasonably stable prices, as aiding in distribution before this all becomes so old and leapfrogged by newer and better projects as to be irrelevant. The caveat concerns the steemit account, which both contains enough to meaningfully affect distribution and was intended to accomplish distribution regardless of price (mostly by giving away coins). If this is done effectively, and in a reasonably expedient manner, then the distribution can improve before price does.
I don't entirely agree that growth necessarily requires distribution first, but it does require something other than what has been done so far.
I articulated my point poorly. The point i was trying to make was that the powerdowns really don't have that much of an effect on price. I think its laudable for ned, dan and other major stakeholders to hold off (especially since it would avoid the perception that they changed the rules for their own benefit) but ultimately, i don't think it would make a ton of difference from a price perspective, unless they powered down and immediately dumped the power downs on the market for whatever chunk of the bid book they could get (and i take it as a given that none of them are reckless enough to do that).
Because the past six months gives what evidence for that assumption?