Prosperity short lived?

Relative prosperity befell crypto and Steem last week with BTC making roaring highs of close to 20k on some exchanges, whilst Steem soared to 2 dollars a coin whilst SBD traded as high as 17 dollars! What the hect!?

Now, despite still being comfortably above 10K, and SBD still trading above par value, the market is now on cool down mode and a lot of people are probably feeling very nervous right now. The common questions are, is BTC topping, and what will happen to Steem?

Futures and BTC

A cashed settled futures product does not directly affect the BTC market. It is a hedging instrument that will likely trade some where above, or below the spot price depending on the sentiment going forward. It does not however dictate the price of the underlying asset it tracks.

Sentiment is incredibly important when gauging market inflection points. On the way up, euphoria from the majority of the market expecting higher off the back of soaring paper profits usually signal the beginning of reversal points.

On the way down, big proponents and stake holders with public influence begin selling the dream. Only yesterday the Winklevoss brothers touted multi-trillion dollar market cap for Bitcoin, indirectly telling people the price is going to go higher, and that they should hold for the 50 or 100k jackpot.

This is all very standard sheep herding tactics to bring liquidity into a market where large players have trouble selling off much of their holdings.

They might be the first public Bitcoin Billionaires with a purported stash of over 100K BTC, but realise that they only need to sell 5% of their stake and the market bleeds off their billionaire status.

The Big Short?

Wall Streeters desperate to get in on the action and short the 'TTB' - (Tether, Tulip, Bubble) will feel the wrath of the BTC market maker. By all measures, BTC is by far the most volatile asset with significant trading volume. Circuit breakers will go off, margin calls made. All this, after positions accumulated, and this simply doesn't happen in a new market in the space of a day.

Market makers require time to accumulate positions, short or long, before executing their kill move. This means a lot of people expecting a dump from wall street shorters on the open of Futures will likely see muted downside. In-fact, the pricing in has already happened. To the new players coming in, the risk of shorting has now increased some what, as whatever inherent reason that drove Bitcoin to nearly 20k didn't suddenly just disappear.

It is still by all measures a deflationary asset very much in the public eye and now it is time to do battle with the institutions the asset was designed circumvent.

And Steem?

Well, Steem has done incredibly well to hold it's ground nearly the base of it's BTC value. Currently that base is around 0.00010000 BTC. That said, Steem is incredibly sensitive to Bitcoin price because of it's inherent dollar associated price feed and internal price tracker. Whether or not STEEM can sustain a market cap near a Billion dollars or more will depend on it's relative value proposition to BTC. I believe it has plenty, but the crypto market as a whole has still yet to fully pile in.

What this means is that the SBD pump makes more sense than STEEM. If anything, the SBD pump is salvation for content creators and less so for investors. With large stake holders able to seemingly sell tens of millions of STEEM on demand, the STEEM market becomes very unattractive to pump, especially if it was a calculated move to draw attention to the platform. On the other hand, pricing SBD at several times it's par value is a clever way of indirectly creating buy pressure on STEEM. Authors cashing out rewards for god send amounts can effectively buy STEEM at fractions of it's spot price if bought with SBD.

There are two fairly different demographics in the Steemi/it ecosystem, the authors, and then the investors. The SBD pump was a true test of author resolve. If Steem was 5-10 dollars, and SBD trading at par value, then authors would be getting roughly the same real dollar value payout. The only difference is, there is a much larger requirement of funds to sustain that price because of simply how many large stake holders will be interested in cashing out.