Bitcoin
Here’s How To Take Advantage Of The Steem Dollars (SBD) Run Right Now
Between November 20 and December 8, 2017, the price of Steem Dollars (SBD) rose from around $0.96 a piece to $7.36. That’s a close to 670% increase in what essentially amounts to a couple of weeks.
Here at Global Coin Report we’ve taken a look at many of these sorts of moves over the past few months and, as part of our coverage, have outlined what we deem as being the driver behind the action we have seen and, in turn, what we expect to come next from the tokens that are moving.
This time around, however, things are a little bit different.
Before we explain why it’s worth noting exactly what SBD is and how it relates to the platform Steemit and the cryptocurrency Steem (STEEM).
As many reading will likely already be aware, Steemit is a sort of social media, content curation type platform over which content creators get paid for the content they create. This payment is made in STEEM and SBD is a sort of sister currency to STEEM that’s designed to track the US dollar and offer a quick and easy way of figuring out exactly how much each Steemit user is getting paid for the content they create.
As such, inherently, SBD should always trade in and around the one-dollar mark. Take a look at action over the last three months, as illustrated on the chart below, and this becomes apparent.
SBD Chart
Of course, pegging something like this to the US dollar is going to have its inefficiencies and the latest run is one such example of this potential for inefficiency. The thing to realize, however, is that this isn’t like a normal cryptocurrency – it’s not running to the moon. It will return to one dollar as the blockchain mechanisms on which Steemit rests adapt to the increased price and, in turn, push it back down.
So that all seems pretty boring – we can’t really short sell SBD so that means that there’s no real opportunity to take a profit from the market on this action – right?
Well, not necessarily.
The link between STEEM and SBD is a liquid one in the sense that when the price of SBD goes up, the dollar or bitcoin exchange rate is favorable which, in turn, means that if you cash out your SBD for BTC now and then use that BTC to buy STEEM, you’re going to get much more STEEM for your SBD than you would’ve done just a couple of weeks ago.
You can then hold that STEEM and convert it back into SBD once things settle down again and the profit you’ve made is the difference between the value of the STEEM you pick up now against the SBD you sell to acquire it and the number of SBD you get for your STEEM once you convert it back into BTC to buy SBD when SBD falls back down to its inherent value of one US dollar.
Of course, there is a certain degree of risk rooted in the exchange rates for the US dollar and bitcoin as compares to STEEM across the period of time it takes between now and SBD to return back down to one dollar a coin but, the higher SBD rises, the lower this risk becomes based on the fact that you got more leeway on the arbitrage trade.
As ever, keep in mind that this is a very volatile market and even these sorts of positions can never be guaranteed. With that said, however, as far as quick and easy opportunities go in the market and, especially, in this market, this is one that doesn’t come around too often.
We will be updating our subscribers as soon as we know more. For the latest on SBD, sign up below!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of Steemit
Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.
Fundamentals
Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.
Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.
Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.
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Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.
The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.
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Fundamentals
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According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.
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