Have cryptos entered into a BEAR market?
Yesterday I wrote an article and shared my thoughts about the recent sell-off in the cryptos and as I expected the sell-off continued. You can check that article HERE.
Surprise!
This morning I woke up to a lot of surprises and one of them was that Steem is down 8% while SBD is up 28%. The price of Steem in SBD in the internal market has dropped from approximately 1.520 to 1.200!
SBD is worth more at poloniex!
More importantly, according to Poloniex, Steem is approximately 0.888 SBD! Yesterday, Steem was about 1.22 SBD at Poloniex. However, @poloniex has still temporarily disabled SBD and Steem deposits. Does anyone know why?
SBD: a safe haven during a crypto-meltdown?
Having said that, this is a great lesson for those who have been paying attention to these price actions. It is now quite obvious that when Steem goes down, SBD is likely to go up! Now why is that?
Why would SBD rally though?
Because SBD is supposed to be pegged to the USD but pegging never really works so if I had Steem and I thought Steem is going to have a big correction, I would most likely exchange my Steem to SBD and hold SBDs until the correction is finished and then I would convert back to Steem. Not only that, many might do this with other cryptos such as bitcoin!
But why would they do that?
Simply because exchanging it to USD would probably cause them to pay taxes whereas exchanging it to SBD wouldn't and they can still remain anonymous. Higher demand for SBD during a sell-off in major cryptocurrencies is ultimately the main reason behind SBD's rally while every other cryptocurrency is tumbling!
Let's top it all off...
As a dear Steemian @hilarski wrote below, people buy SBD as a hedge and they don't have to take their Crypto off the exchange. It is pegged to $1 USD on the way down but nothing stops it from going up. If SBD ever drops below $1 USD it will recover pretty quick.
Don't forget to leave a comment!
Let me know what you think guys and if you like my thoughts, and agree with me, make sure you share this information with your friends. :]
Don't forget to UPVOTE, COMMENT, and/or RESTEEM!
FOLLOW ME ⇿ @msg768
UPVOTE, COMMENT, and/or RESTEEM!
FOLLOW ME ⇿ @msg768