How much new money is required now to keep Steem’s price at 12 cents.

People may wonder how long Steem's value can keep falling even at this low price.

One has to understand that 820,000 Steem are created weekly for the reward pool. It is roughly 117.4K Steem per day. Moreover, STINC supposedly sell 800K Steem per month which is roughly 26.6K per day. In total, 144K Steem are for sell every day. How ever, almost half of the reward pool or 58K Steem are distributed as illiquid Steem power (SP).

There is a good chance that more than 70% of liquid Steem rewards (it could be more) are powered up by the stake holders since Steem's price is not lucrative enough to sell now. It means 18K Steem in the market for sell daily.

For calculation purpose, we will assume two scenarios where 15%(9K) and 50% (29K) Steem are for sell.

We will also assume that another extra 5-10K Steem is power down everyday for different reasons such as weak hand exiting, ROI catchers or, developers selling for business cost etc.

In best case scenario, 40K Steem are sold from STINC, stakeholders and for other purpose. At the worst case scenario, 65K Steem are sold.

At 12 cents, 40K Steem costs $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 85 ranks and 1.4M accounts, it is pretty low amount of money. It is why Steem can sustain for eons at this low price.

However, when Steem price increases to a higher value say, $1 then more power down will take place. In that case, daily Steem available for sell could be much more higher than 65K Steem per day. Let us assume that at $1, 100K Steem are for sell every day. Then $100K per day or $3M per month or $36M per year is required.

$3M per month new money 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.

One good example is the @sprinterlands, Steem base card game DApp is hitting continuous record for Marketcap (e.g. $4.8M) even in this bear market. The secret is the both growing userbase and active players.

Therefore, Steem can reach higher floor such as $1 with increasing its users many folds even in this bear market or in a bull market when new money enters the market en-masse.

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.
@dtrade
Cryptominer , occasional trader and tech blogger since 2013