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RE: Is this why the price of STEEM is struggling? STEEM Withdrawls 2017
I believe it is healthy for the ecosystem when Steem is changing hands. When a whale sells his stake, this stake gets bought up by several new investors. Steem works on a Proof of Brain algorithm, which thrives when there are more users. So the spreading of Steem is actually good, even when this dampens the price on the short term
This is an excellent point. Steem distribution is extremely unequal at the moment, and the whales powering down is very good for this platform. That Steem will end up in many more hands, or many more brains, if you want to look at it that way, each being a new neuron added to the super-brain that is the decentralised autonomous Steem community.
I get this, and do agree to an extent. yes we need the steem in more hands but we also need liquidity
Technically more steem going to the exchanges builds liquidity. What we need is demand.
I also believe it is health for steemit to change hands, the problem is the stakes are not fully reinvested into steemit, as can be seen by the withdrawls vs deposits. so how much is held on exchanges, and why is it there and not on steemit?
There are traders and investors. Steem that is not powered up does not receive interest and does nog give voting power. There is a price to this. It actually costs money to keep your Steem just as Steem.
With there being more liquid Steem available then before a higher percent of the market is basically saying that it is currently more profitable to trade than to power up. Or they do not know what to do with the Steem Power.
This ecosystem is quite new and a lot of things are still being figured out. Aside from self voting it is quite difficult to just start turning your voting power into more Steem. Traders are mostly looking for short term gains while investors buy up the lows and are currently stabilising the price around $1.
I personally think this $1 mark is the rough bottom for the new run up. Maybe starting early next year after the release of the smartphone app, HF20 and SMTs
If you look at the total market cap over time you see that there was an inital hype and after that the pice bottomed out and stabilised and go for another cycle, with a higher high than before and a higher bottom then before. This cycle will repeat itself over and over and is based on human emotions