Steem at this price is an asymmetric bet with very low risk.

in LeoFinance •  6 months ago  (edited)

Asymmetric bet is that upside profit is huge but bottom side risk is low. Steem at this price of 12.5 cents fall into asymmetric bet class asset.

For example, if one buys $1000 worth of steem, in extreme case they can lost $1000 which is very very unlikely given the feet Steem have already achieved: the most popular DApps among the blockchain and users from all over the world. The case could be that Steem may become 6 cent crypto for years: a worst case scenario. In that case, after couple of years of waiting, one can sell for $500 and consume $500 loss.

Image source:

Now for upside. Steem had three bull runs. Just after 3 months of its launch it went to $4.5. Then in June, 2017 it went past $2.6 and finally, reached all time high in 3rd January, 2018. Now imagine for any if for any reason Steem breaks its ATH again in the next couple of years, the gain would be staggering $67000. Even at $1 a Steem, the profit could be $7500. Moreover, one decides to wait for two years then they can earn 30% more Steem just by delegating or actively curating. In that case, even after two years Steem is still 10 cents, then loss would be nothing or break even.

But the potential upside makes it asymmetric bet. If Steem correlate to overall cryptocurrency market or the king Bitcoin, then Steem can literally reach even $20 in two to five years. In that case, the gain would be $160K, a game changer for anybody.

Is Bitcoin asymmetric bet? Probably no and yes. In extreme case, Bitcoin can reach $100K, its markecap will be bigger than Apple or Microsoft, at $1M its marketcap will be equal to US's GDP which I believe very unlikely. I think BTC will reach to $30K and then stuck between $10-25K for eons. Moreover, BTC does not provide any utility other than store of value. It is a nightmare as transactional currency where stable coins have already very useful. Depending on a single most utility it will always be a big risk too.

On the other hand, Steem can not only work as store of value, it is powering a DApp empire and in future, it will power a token empire. With so much more utilities and probability of millions joining the network, makes it an asymmetric bet at this price point.

I would rather bet on $20 Steem (160X gain from 12.5 cent) rather $1M bitcoin (142X gain from $7K) just because usefulness and potential developments of Steem compared to Bitcoin. Mainstreet and wallstreet still do not have any clue about the other cryptocurrencies such as Steem or EOS that can power thousands of Decentralized Autonomous Organization (DAOs) of the future that will replace the centralized middlemen such as Facebook, Amazon or Google.

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

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Many people are so risk averse that losing the 1000 is too much. I think ego plays a part here too as no one like to lose.

Agree 100%

It is ego, and it's one of ego's most important roles, managing risk.

When we lived on the plains it was more important not to lose that leg of lion vs gaining a second.

Losing it would result in death, gaining one would only result in a bit more life.

Today, that means that if on a happiness scale, we won $20 it would move positive a bit; but losing $20 it would move in the opposite direction a lot.

It's why most people buy high and sell low, they hate losing more than they like winning.

lambo soon

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yea still waiting for the dream but right now still stacking up some sportd because its one of my favorite dapps/cummunity on steem, hopefully will stack some leo, before going back to stacking steem, as one earns more from dapps these days when compared to the main steemit app

Completely agree with my friend!
I see steem to reach previous lows to at $0.07 per coin and the even start buying some more when we are there ;)
I bought my first steem at price of $0.65 but still I see a higher price at,at least $50 for the next bull run.

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in future, it will power a token empire.

SMT’s have immense potential. At first, pioneers will implement them. But at some point, household names will dive in.

Learned a new term today, thanks!

I agree, I believe Steem is the future. Getting in now is, imo, a smart move for future you :^)

Fully agree, that's why I have an open position BTCSTEEM for about 1 grand. Just waiting for the next BTC jump to fill the order! ;)

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