Slow but Steady Price Movement of Steem
Since its launch, Steem has offered many appealing features to crypto users. Holders of the altcoin enjoy fast transaction processes and user-friendly tools. In addition, users will find it easy to earn STEEM just by posting and curating content on Steem-powered social network platforms.
Despite these features, Steem’s price is nowhere near the price of popular cryptocurrencies like Bitcoin or Ethereum. Since its release in 2016, this altcoin has shown slow price movements. From US$0.64 since it was listed in crypto exchanges, Steem closed 2017 with a price of US$2.69. Since then, it has experienced minimal price increases. Because of this, more recently launched digital currencies, like Bitcoin Cash, have already overtaken Steem.
Factors Affecting Steem Price
Considering the innovative features of Steem, why is it experiencing slow price movements compared with other crypto coins? Here are some of the reasons.
The creators of STEEM developed the altcoin to have a 100% yearly inflation. This means that if the market cap remains constant, the coin will lose half of its value the following year. Of course, this poses a risk to Steem holders. They might end up losing more money to inflation than they will make profit from posting and curating content, especially if they are not popular contributors.
Compared with other cryptocurrencies that are used for long-term investments, Steem has a different purpose. When you hold STEEM, you are supposed to trade it either for Steem Power or for fiat or other cryptos. Since this altcoin is not meant to be cashed out, Steem price remains low.
Long Cash-Out Time
Since the launch of Steem, more online content creators have joined blockchain-powered social media platforms in order to earn coins. On Steemit alone, there are over 8 million entries and over 32 million comments posted. While this figure means there should be a huge supply of crypto coins ready to be cashed out, this situation is not the case. Once you earn from curated content, you will receive Steem Dollars (SBD) and Steem Power (SP), not STEEM tokens. If you decide to convert your SBD to STEEM, you will have to wait three and a half days before the blockchain can finish processing the conversion. Even though you can withdraw your earnings, there is a long waiting time before you can receive the liquid tokens.
On the whole, the reason for the low price of Steem is its purpose of being a short-term trading vehicle rather than being an altcoin used for long-term investment. The long processing time of SBD-to-STEEM conversion also contributes to the low price of the liquid token.
What is Next for Steem and Its Price?
Inflation may cause the Steem price to go down every year, but the price should not remain low for long. The altcoin’s developers have many plans in store to improve the value of the cryptocurrency. These are some of the plans:
Increase of Steem-Powered Social Media Platforms
There is an increase of Steem-powered social media since the launch of the original platform Steemit. Some of these platforms have similar features to that of popular sites like Instagram and YouTube. What sets these Steem-powered apps apart, however, is that users can earn from posting content. This added feature will definitely attract content creators to join these new platforms.
Improvement of User Experience
Steemit and other Steem-powered platforms are still in beta stage. The creators and developers of these sites are continually improving features so that users can enjoy easy and convenient content creation and curation. Since all the codes are open-source, other developers can pitch in to improve user experience.
Launch of Smart Media Tokens
Steem has recently finished an initial coin offering for Smart Media Tokens (SMT). Buying in this token will help existing sites benefit from Steemit’s features without having to use the social media platform. One such feature is a widget that content creators can add to their own blogs or websites. By adding this widget, online writers, photographers, and artists can earn based on the number of likes their posts get. They will then earn SMTs, which they can convert to their preferred currency.
Despite its current low price and its slow price movement, Steem still shows potential with its way of incentivizing online content creators. Many users have invested in the cryptocurrency as they have seen the possible success of moneymaking content creation platforms. Investing in Steem is a huge opportunity, especially in a world with increased social media use. If Steem manages to keep its position in the market and be a step ahead of competitors, the crypto coin will see an increase in price.