In my last blog, I discussed how Steem can sustain 12 cents a piece for a long, long period if BTC does not break $7K or lower. At 12 cents, either 40K or 65K Steem (i.e. this number is based on assumptions) are for sold from the rewardpool, STINC and other parties. The cost for 40K Steem at 12 cents is $4.8K per day or $144K per month or $1.73M per year and 65K Steem costs $7.8K per day, $234 per month and $2.81M per year.
Therefore, roughly $5-8K new money per day is required to sustain Steem's price at 12 cents. For a global blockchain with 80s ranks and 1.4M accounts, it is quite sustainable.
However, it will become tricky if Steem is pumped to $1 in this bear market.
At $1 a Steem, the amount of powered down Steem will be significantly increased. In that case, daily Steem available for sell could be much more higher than 65K Steem per day. Let us assume that at it is around 100K Steem that will be ready for sell every day. Then $100K per day or $3M per month or $36M per year will be required to sustain Steem's price for a year.
However, there is a caveat. If all these Steem are sold being powered up than 37M Steem will be moved out from the market in a year. But due to high price more Steem will be powered down too. It is uncertain whether more Steem will be powered up since overall number of Steem will always increase due to predefined inflation rate (e.g. right now 8.5%). Most likely, number of liquid steem will increase due to opportunity to sell it higher and trading purposes.
Moreover, $3M per month new money required to keep Steem at $1 is a significant for a chain with only 20K active users. That is why a major altcoin bull run is required to sustain Steem's price at $1 and beyond.
However, Steem chain can achieve 10M accounts and 100K active accounts, Steem's price can reach $1 right now. The problem is the lack of mass onboading, rebranding and aggressive marketing. However, SMTs can solve the problem too. If a few SMTs can bring in millions of new accounts, it is possible to achieve 10M accounts in this bear market. In that case, SMTs has to buy millions of Steem to claim millions of accounts to onboard their users.
The only issue is that entrepreneurs will need a profitable business idea and deep pocket to build an SMT based DApp that will bring millions of accounts. We already have one such example in @sprinterlands whose marketcap has recently reached close to $5M. Several of its tribe tokens have highest volumes in the SE market.
Is @steem.leo, @steemhunt, @appics, @actifit, @nextcolony, @roadtoriches will next such DApps that will bring in millions of new accounts? Or, we will see plethora of successful but newer DApp that will bring millions of users to Steem, not the old guards.
Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions. This opinion is only for educational purpose.
Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.
Thanks for reading.
Cryptominer , occasional trader and tech blogger since 2013