Good news, everybody!
For those of you who are new to the cryptotoken, distributed ledger, or blockchain world (these all are nearly synonomous, depending on the implementation, although there are very few non-blockchain tokens), there exists different exchanges where you can CASH OUT your hard earned Steem Backed Dollars (Ticker: SBD).
A simple exchange is run by (current) witness blocktrades at blocktrades.us.
Ignoring OpenLedger options (sorry, guys! you can find out more about OL if you are interested), the other two options that exist are two popular cryptocurrency exchanges: poloniex and bittrex.
Premium Prices on SBD
As of the time of this writing, there exists a shortage of SBD which has inadvertently allowed for the speculators (traders and the like) to drive the price of 1 SBD beyond its peg.
Currently, the price of SBD is somewhere around 1.30 - 1.40 USD, a premium of 30-40%!
Wow! That means you can receive more on your post than you expected.
In fact, there are two different ways that you can achieve a premium. I will describe both and show you how to calculate which way is best via (semi-contrived, but currently close to real world) examples.
- Sell SBD directly on Poloniex or Bittrex, OR
- Buy STEEM on internal exchange and sell on Poloniex or Bittrex.
We will assume, as of now, a price of 675 USD / bitcoin.
Selling SBD directly
As of the time of this post, there is approximate 15 bitcoin supporting a price of .002 btc / SBD (approximately 7600 SBD worth), which is approximately a 34.6% premium on your SBD.
Similarly, Bittrex has 1.5114 btc support (around 800 sbd) to .002 btc (once more, 34.6% premium).
Instead of choosing the 'convert SBD to STEEM' option (which, incidentally uses the median price feed for conversion rate, which is currently much lower), one could consider either of these two exchanges as options instead.
However, there is an additional alternative ...
Buying STEEM Directly on Internal Market and Selling on External Exchanges
Right now, due to the high premium of SBD, users have been selling STEEM for SBD on the internal market, forcing the STEEM internal market to be way down in comparison to the external market.
This means that there is a premium going the other way, as well.
One could buy 4000 STEEM for about 12400 SBD all the way up to 3.170 SBD / steem (average around the prices of 3.10 SBD / STEEM). This could then be sold on either Poloniex or Bittrex.
Note that current prices of STEEM on the two external exchanges is approximately .0068 at the time of this writing. That means that 1000 STEEM could be purchased for about 3100 SBD and then sold for 6.8 btc, or approximately 4590 USD. This is an increase of 48% on the value of your SBD! Note that 4590/3100 is approximately 1.48.
Conclusion
How do you determine which is best for you? Unfortunately, this takes a little bit of mathematics (but not too much!) and is a matter of simple ratios (i.e. fractions) and multiplication. Nothing more, nothing less.
All you do, in order to determine the best option, is multiply the amount of SBD by the best rate on either of the
two exchanges (possibly a combination of both) and compare this with how much STEEM you can buy on the internal exchange and then sell on either Poloniex or Bittrex.
Once you compare the ratios of your gains, you can see which one is best.
Keep on Steemin'.
buy and hold !
Hodl it!
HODOR!
Amen.
We have a social platform that has shown huge rewards to individuals posting great content.... And some that is met skeptically. If there is interest in buying steem dollars above retail value...... I would say it's an interest in steems future beyond today's value. I know the sbd is a rewardable portion that can be cashed out, and that is a great avenue you've posted out to maximize that opportunity. I would think they're seeing the opportunities of tomorrow. I held onto my bits like a miser. they had value to me beyond money.... Within hours of discovering steam I converted them. It wasn't a ton.... My up vote won't buy you a pizza yet..... But everything I get for quite some time goes back into this. Your voice has value.... How about your opinion on the subjects?
Well, there is a 10% APR interest (current) on SBD. I don't think that justified the higher rates we've seen on the markets. In fact, I think 10% APR would indicate a lower trading value than approximately 1 USD / bitcoin.
It could be the case that traders speculated on Poloniex and Bittrex do not understand that this is a pegged currency and that the premium prices (at least in my opinion) are unjustified. If they do not realize / understand these mechanics, then the current market valuation makes sense.
I can't see any other reason for it otherwise. Naturally, people will want to move out of SBD to pay for bills, lock in gains, etc. With the total amount of SBD that is created per day, I would expect that these prices should reach parity much closer.
However, it is important to note that there is no arbitrage opportunity, or nearly none, in buying sbd or steem off an external market, selling on the internal exchange for the other token, and then selling the new token on the external exchange.
The very same remarks and compliments I just expressed towards @clevecross
apply to this comment of yours, and I'm sure after posting this reply and looking
through your posts/comments I will maintain that stance and follow you as well,
always granting my endorsement where appropriate, and upvotes every chance I can.
Thank you for this comment, and thank you again for proving that there can be
much more to this entire platform than a literal #circlejerk of posts redundantly
stating nothing more than how great steemit it, just for the sake of money-mongering
by idiots spamming the very same content, for the very same goals.
My apologies for effectively all of this reply's content being off-topic, but there is never
too little time to honestly thank the damn few people on this site right now for doing
exactly what we all should be, and for the purpose and sake of furthering eachother's
understanding and/or knowledge, and not in the hopes of it reaping rewards for ourselves.
Signed,obfuscate-meVisiting my family and not reading responses deeply for interpretation. I hope I didn't hijack content of your post. Was not intent, just a thought at the time from an enthusiastic guy
I'm selling Steem Dollars for Steem on the internal market and then using it to power up!
@complexring Hey. I was thinking the same thing a couple days ago. Do you know how to calculate how many SBD's are being created? Also, does the price of SBD going up affect how many SBD's are rewarded to content creators?
Ok so let me get this straight...
If I buy steem with steam dollars, then sell it for steam dollars on an exchange, I can come back here and buy more steem and rinse and repeat?
How does the proceas work exactly? I am going to check these exchanges now and run soem numbers. You rock for posting this intel!
Thank you for posting. QUESTION: should steemit let us steemers advertise using steem? Be sure to tell everyone you know to come vote here at: https://steemit.com/steemit/@kingtylervvs/if-steemit-ever-does-decide-to-advertise-there-is-only-1-way-it-could-work-in-my-opinion-debate
This is a democratic community decision.
Upvote the #steemengine for in house steemit poster ads!
THIS.
This is why I follow you, verging on stalking you, haha.
Always great insight and/or information, wrapped up in fully explanatory, yet easily
understandable manner to anyone with a decent grasp of the English language.
Signed,obfuscate-meUnfortunately, cryptocurrency traders are much more shrewd than that. You'll find that they are guys that would trade on futures markets and stock exchanges if regulation didn't make their practices illegal.
Read this post for an understanding of what's happening.
I agree with you. Anything I earn on Steem I keep in Steem. I am in it for the long run. I only invest in tokens i see long term value and use in. I am not a speculative trader at all. I buy/earn and hold. Now if I could only get my stolen Steem back from the hack I'd be dandy.
first official STEEM LOTTERY https://steemit.com/lottery/@willytrader/first-official-steem-lottery
Wish I had had some insider information on when Poloniex was gonna add Steem. That's the beauty of crypto, wouldn't even be illegal.
People could have easily surmised this from the blockchain and the transfer of keys several days ago.
https://steemit.com/steemit/@liondani/speculation-i-have-strong-indications-that-we-will-trade-our-steems-on-poloniex-the-next-days-maybe-the-next-hours#@liondani/re-splus-re-liondani-speculation-i-have-strong-indications-that-we-will-trade-our-steems-on-poloniex-the-next-days-maybe-the-next-hours-20160715t115816002z
That post was a nice scoop
I ask please that you see my post https://steemit.com/crowdfunding/@webocel/58kd3g-my-dream-needs-your-vote-crowdfunding, with your vote I can put my business and thus have a job and be able to feed my children. With just a few clicks you can change my life. Thanks in advance. Nicolas
I think that as indicates the following information, Poloniex will operate soon with steem
The rich list of steem
STEEM
1 steemit 1184119.770 STEEM
2 bittrex 548986.873 STEEM
3 poloniex 337331.245 STEEM
DÓLLARS
1 poloniex $158417.246
2 bittrex $61024.792
You can find this information in the link here:
https://steemit.com/steemit/@kirtash85/top-10-richlist-users
Poloniex is a pretty fair exchange if you ask me! It would be legal but they truly have respect for their users.
#Poloniex truly is the most honest, reliable, and respectable #exchange by far,
and without question. Both to have ever existed, and AFAIC, to ever exist.
Signed,obfuscate-meTrue
And that's why people continously get SFYL'd with fake volume and spoofed bid walls.
i would have love to jump on it if i knew too. that is why an oracle is really needed for this game
Hold some and sell some.
Have to sell SBD for now and buy it back later. Because SBD always should be around the one dollar level.
its time to HODL (but thanks for the info anyways)
Wow, $414.41...
you words are like spun gold
Either a bullshit pumper or a bagholder, I've written a lengthy post about it, no one cares. Up to them. In the 8 years since crypto began nothing changed.
the problem of making community is that if you do not have enough money to prove it works, do not believe.
Several people are trying to bring people to steemit, but as we have little steempower little steemdolar and have no pay stubs, people ignore us, other whales, not usually give up vote to anyone.
Even if one were generous enough, I assure you, the community would increase from us considerably.
Sorry for my bad english, i speak spanish and portugues
I think you'll find that many people are interested in helping to increase the community. Unfortunately, I do not know Spanish, but there are plenty of people who are bilingual and can help with translations and expressing the ideas that non-native speakers have in order to grow our community. Find them out and seek collaborations! Most here are quite friendly.
You speak Spanish and Portuguese? Please tell your friends that the post you just made got you $9.47. The issue right now is the interface to Steemit isn't very good. It's hard to find quality posts through the noise.
this is a good moment, i have now 24 steemdolars, it work with this.
I Believe the persons, they will believe
thank you for writing. STEEM is trending up right now, so its win win!
Good luck! Looks very promising!
BTW, should steemit let us steemers advertise using steem?
Be sure to tell everyone you know to come vote here at: https://steemit.com/steemit/@kingtylervvs/if-steemit-ever-does-decide-to-advertise-there-is-only-1-way-it-could-work-in-my-opinion-debate
This is a democratic community decision.
Some hater on your blog goes around downvoting people comments for no reason lol.
The internal market is a hidden gem. Thank you for opening my eyes to it. That's where I'll be selling my SBD from now on. :)
SBD can also be exchanged on http://www.bitsquare.io "The decentralised bitcoin exchange."
SBD liquidity is low.
Try Bitsquare today!
I was awake when Poloniex added Steem and SBD to their exchange. While I was transferring my SBD from Bittrex to Poloniex I watched SBD rocket up to .004 which was about $2.70 USD.
I expect a lot more users to start joining especially from the exposure we got from Poloniex. With this said, I'm going to assume that 1 SBD will get closer to the 1:1 ratio. Let people play the markets for now. I'll gladly sell my SBDs for over $1 each now and just buy them back when price comes back down.
Also there was a pretty large spread on ETH/STEEM earlier as that is one of the pairs most people overlooked. I was planning on selling most of my ETH due to the upcoming hardfork but found that trading it for STEEM worked out much better. We will start to see ETH money flowing into STEEM more and more. The real question is if we can pass ETH's market cap. :X
This is a good article for many people are definitely looking into cashing in some of this wealth and allow for this whole venture to keep on growing! Thanks a bunch for the info, namaste! :)
another path would be to purchase STEEM in the internal market, selling the STEEM for BTC -> fiat
https://steemit.com/steem/@jl777/sbd-at-0025-btc-how-is-this-making-any-sense-i-explain-what-happened-with-the-pricings-today
the "premium" is not exactly what it looks like due to the discounted purchase path for STEEM in the internal market
I explain this in my post and say that you should compare the two ratios and use that as a means to decide which direction to go, i.e. buy steem with sbd on internal and sell on external or sell sbd on external.
In fact, you are right that there is no 'premium.' The market is in total equilibrium in that respect.
with all the headlines saying "SBD is selling at a premium", my guess is the vast majority of people only go one way without considering the nominal premium might not be enough to compensate for the discount. but all in all a very interesting market event
Well, the point is to attract users to READ the entire article, not just the headline. If they do so, they would see there are 2 options for a 'premium'.
This is the beauty of knowing the ins and outs of crypto trading and trading on market differences between platforms (arbitrage trading).
Thank you for sharing.
I'm planning to hold it at least for 3-4 month, when the price go up x10 i will consider to start Power down.
Wow! Things change quickly in the Steemiverse! I remember telling people they could only get 75 cents or so to the dollar if they wanted to cash out in a hurry, like a week ago! I also read a post about how no one would want to hold Steem itself, that made a few thousand dollars, and was considered great advice for newbies!
the mathematics are simple: steemdollars are traded up to 30% more on external exchanges.
But also steem itself is traded 30% more on external exchanges.
Why is this so?
Its because the peg - internal conversion from steemdollars to steem takes one week average of the currenct steem to dollar price, which is 30% below the current steem price.
this is so mainly to dont make it easy to manipulate the peg though the price feed providers.
So with just trading in and out steemdollars you cannot make a win.
the only win you can make is if the peg - internal steem conversion rate - is less then 30% below the current steem price.
in this case you can directly internally convert your steem dollars to steem and then sell the new created steem on external exhanges to steem dollars. the steem dollars you can then convert again to steem and so on untill you can make some win with it.
good luck and have fun!
UPDATE: Oh in this case it could also be the other way round, you have to convert internally steem to steemdollars and then sell them on an external exchange to for example bitcoins. then buy with the bitcoins steem on an external exchange so on and so on. sadly steem seems to miss an ability to internally convert steem to steem dollars, so we most likely just have to wait until the 100% steem inflation per year (currently even 5000%) brings downs the steem price to one steem dollar or below. so im sorry in this case, you cannot do anything to correct the steem dollar price, except waiting for the steem inflation to take place and bring the price down again :)
I think that's what I said. scratches head
I never said there was arbitrage, per se, only that there is a premium price for SBD on the exchanges for authors who are interested in cashing out at a higher rate than what they expected.
i think that abritrage model wont last.
if there is money to be made, traders are stepping in and will harvest
So I own multiple businesses and put together deals for a living. If I can figure out how to convert all this s*** back and forth and get dollars into my bank account then Anything is Possible.
I need a math bot..I tried crunching numbers and failed horrifically in trading yesterday..I sure didn't maximize on sells and trades but I did profit some! Thanks@complexrig for this share the future for trading will be better now for me.
I believe an arbitrage opportunity, if you can see the upside potential in STEEMIT, is to convert your STEEM dollars to STEEM and subsequently power up (i.e SD->STEEM->STEEM POWER) and watch it multiply many times over (akin to a DRP (Dividend Reinvestment Plan), as opposed to simply holding dividends as cash in the bank)
Very good analysis. Obviously the market conditions will be constantly changing, which will impact the calculations.
I would think all Steem users should find a balance between holding and selling. We want Steem to grow, and if we hold onto our Steem and SBD, their value will increase. But in the other hand, each individual might need to cash some of their assets out. Just keep a balance so that Steem will continue to grow and not become a playground for scalpers.
Good info, we'll put this on our next "Quick Facts About Steem & Steemit :)
https://steemit.com/steemit/@cultura.bitcoin/quick-facts-about-steemi-and-steem
me encanta
I will keep all my SBD i earn.
The price of Steem etc. is at the moment still in the beginning. it will hit 100 USD within the next 12 Month
yesterday when i heard that steem on polo i brought more steem sold my shit eth and few bitcoins and now holding steem hope steem touch sky
#longlivesteem #makeusrich :P
damn nice find, I trade a little on polo but only casually so I didn't notice this.
its a legal things to do?
OK, I hope you make money!
Thanks for all this info, I'm really really new to cryptocurrencies, so it would have probably taken time for me to get there alone :D
I'm following you :)
Awesome post @complexring. I'm just trying to get my head around all this. Didn't realise when I joined this exciting new social network that, in fact, I was entering into trading in currency stocks haha!
Great post!
I finally stumbled on real, complete and interesting article! Good job!That's what I personaly would like to read
buy now and hold it's good idea
nice !
buy and hold !
A young market with many exchanges and a couple of pairs sees many arbitrage opportunities. I have been doing it for the past hour before noticing your post ! I guess great minds think alike.
very interesting post...
Wow what an awesome read....I'm new to Steemit and really didn't get it until reading your article...Thanks
definetly the best coin to invest right now - lot of fame - lot of perspective on the future - HODL RECOMENDATION
I'm actually trying to do this but I cannot figure out how to send the SBD out of Polo ... seriously I am that confused.
Please help https://steemit.com/steemit/@decrypt/how-do-i-send-steem-or-sbd-from-poloniex-to-steemit
Currently 148 steem on the purchase option costs 1 btc. On Bittrex 148 steem costs 0.74 btc.
make sure everyone participates in the first steemit lottery
https://steemit.com/money/@nabilov/the-first-steem-lottery-hosted-by-member-nabilov#comments
So glad I joined when I did. Right after the attack, still got some free SP for signing up, Poloniex adds Steem and then accounts can't be created quick enough? I got in just in time.
https://steemit.com/money/@positive/i-will-pay-you-usdusdusdusd-to-link-my-posts-in-comments-first-steem-affiliate-marketing-steemit-money
thanks! well explained!
Fantastic news
OMG
Thanks for giving insipire
This is a form of arbitrage right?Shouldnt it be closed as traders and bots take advantage of the window and so the market will force it closed?Seems too good to be true?
It's not so much arbitrage as normally you think of arbitrage as a 3 way trade. This has more to do with authors writing posts receiving more than what is displayed on the posts and briefly outlines how to choose which option is the best out of the two to obtain the 'best' premium.
Just to be clear one SBD should cost $1.00 USD. But I've been watching and trading these markets for about 10 days. There has been a premium on SBD probably 95% of the time (up to $1.45) and I've seen it near par of $1.00 maybe for a few hours.
Why is the Steemit algo failing to maintain a $1.00 peg? Who benefits from this? Any expert opinions on this?