We're approaching the end of 2017 and as I reflect on the broader #cryptocurrency market and its incredible bull run over the past year, I decided to supplement my previous post about this topic with an additional one.
On December 20th, 2017, Ned Scott, one of the co-founders of Steemit Inc, tweeted the following:
@Ned's tweet immediately caught my attention and I responded in agreement while referencing my previous post in reflecting on why steem has lagged the performance of #bitcoin and other cryptocurrencies.
I agreed on the basis of the potential of this platform and its foundational blockchain to open up opportunities for content creators to be rewarded for their online contributions, but its potential is distinctly different from its present form.
For steem to be valued among the Top 10 cryptocurrencies in the world today, its market capitalization would have to be about $7 billion USD, per the current ranking on Coinmarketcap at the time of this posting. The number ten slot is currently a tug of war between Monero and EOS. Interestingly, EOS is in part the creation of Steemit's other co-founder, Dan Larimer.
In consideration of Steem's usage level and its association with #steemit, is it worth $7 billion USD today? It's hard to measure valuation in the cryptocurrency space like one would with publicly traded stocks, but the market in both assets ultimately votes with its dollars and the price on the screen reflects the present consensus among the investment and trading communities.
As such, it is clear that crypto investors and enthusiasts simply are not in agreement with Ned's assertion. While steem has risen in recent weeks and currently trades above $3 USD, its market capitalization is still less than $1 billion USD. That is no doubt an admirable accomplishment for a platform that has been online for less than two years, but it is still a far cry from $7 billion USD or more.
Assuming steem were in fact valued at about $7 billion USD and a Top 10 cryptocurrency today, its price per unit at the current supply of roughly 260M would be about $27 each, give or take. I don't see this happening unless more content contributors from Medium, YouTube, etc. flock to Steemit en masse.
Even then, the site in its current form makes it difficult for new users to broadcast their content since whale accounts regularly dominate the trending posts. Content discovery is also lacking without a built-in and robust search functionality.
Steem itself is not offered on many exchanges and its trading volume in terms of liquidity is quite limited. This likely is another major setback in its quest for glory. At the time of this posting, its 24 hour trading volume is about $6M USD, whereas Monero is about $250M USD and EOS is about $350M USD.
So what will it take for the crypto market to catch on with Ned's viewpoint and for steem to become a Top 10 cryptocurrency? I welcome your feedback in the comments below!