Why You Should Not Trade on Exchanges - Buy/Sell Tips by Charlie Shrem

in #steem8 years ago (edited)

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Thank you @Gandalf for suggesting I write this

Lately with the falling price I've seen calls for "Stop powering down" and "Whales are dumping their steem". We need to stop this.

When you see the price falling, rising or doing anything crazy, keep this in the back of your head "Markets are Efficient". Free markets always win. It's why we always end up in the global financial meltdowns every year like Venezuela and Argentina. Governments step in and try to control the markets, capital controls and the like.

When we tell people what they can and cannot do with their own money, markets fail.

So how can you sell Steem without hurting the price? Please stop using exchanges!

Traders and speculators are on exchanges, they are ammeter and professional traders that buy and sell assets for the purpose of making a profit. They make money when the price is going up and they make money when the price is going down.

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When you or I go onto an exchange to sell some Steem, we are trading against them. We could be hurting the price by adding unwarranted selling pressure, even when you have a trading bot that has orders higher than the current price. These add walls.

I started using Blocktrades.us recently to sell my Steem and SBD. Blocktrades has a trading desk and has a financial incentive for Steem to succeed. The difference is he does not sell into the market and hit SELL 10,000 STEEM which most of us do.

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The biggest threat to steem's price is when a whale dumps into the market or places large orders that scare the market. Most of our whales are experienced enough to realize this. But it's really hard to do this well without using a bot.

Large buys and sells of Steem should be done OTC (Over the Counter)

In regards to Steem, I consider OTC all retail companies like Blocktrades, Shapeshift and Changelly. They have professional trading desks and know how to buy and sell without causing day to day volatility.

The benefits to buying and selling OTC are great. You get a good rate without slippage, you don't have to wait the few days and are not suppressing the market.

Your funds get delivered instantly!

By not keeping your funds on an exchange you can also save from those occasional losses on a hacked exchange, something generally ignored when people do their pricing analysis.

In the long term this is important.

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We will hit a point where either 2 things happen:

1 - People stop selling because the price is too low and they are willing to hold and invest in the future of the platform.

2- Everyone panic sells and we die.

I think #1 is happening. Volume has been going down as we go lower.

If you sell retail, it won't effect the price as much! Please sell retail!

What are your thoughts?

-Charlie

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Mr. @charlieshrem. Your gift for explaining dynamics of Steemit in an easy to understand form is what make you so valuable to the platform. Thanks. BTW...I just received my Steemit Wirex card you recommended in an earlier post.

If everyone is trading OTC and not on exchanges, where do we go for price discovery? Markets are only efficient when provided with enough data. An example is how the mobile phone has greatly improved market efficiency in Africa in recent years, without price info you can't make good price judgments.

There are good reasons why large buyers should go OTC, but the masses of smaller buyers are much better off using exchanges benefiting from better prices and more price data.

Great question and I'm happy you brought this up! Where we get price discovery is a question we still struggle with in Bitcoin as well. I personally use index's that incorporate OTC rates like LocalBitcoins and Gemini.

Since Blocktrades, Shapeshift and Changelly trade on the exchanges and source their assets other ways, they set their rates. Their rates need to be good and competitive or else we will go elsewhere, like back to the exchanges.

At the end of the day, value is "What someone is willing to pay for it".

I would make the case that OTC rates are a truer indicator of price discovery than exchanges

the point is, you don't avoid the exchange market by using shapreshift but you do pay an extra fee of ca. 10%. These things make sense for small purchases and convenience. But you should always use exchanges when buying larger amounts.

Dear @charliesherm, we have a good article about trading process on simple instant exchanges, you are welcome to have a look: https://steemit.com/money/@changelly/network-fees-and-suggested-minimal-amounts

My thoughts are people should buy/ sell at a price they are comfortable with on a platform they trust.

If the choice is between two platforms, I'd advise going with the one that would give the better return. The fact is, no-one knows what the person on the other side of the trades intention is, so their is no point second guessing.

Blocktrades or whoever you buy or sell to OTC may opt to pump or dump on the market (for whatever reason) and they are entitled to. It's their money afterall.

My job is to know what my strategy is and execute it. Simple.

As you state, the "free market" will ultimately decide regardless. The free market includes those that are day trading, swing trading and attempting to manipulate the market. Let the buyers (and sellers) beware!

so now I can look forward to a new stats report of who is selling on exchanges and who are not :)

from SD to visa debit using blocktrades

Yup, I just ordered one but the Visa Shift Card not Bitpay (no reason, that's the one I saw first and it's connected to Coinbase from the start, which I already had). Same $10 sign up and no fees (YET! The TOS says reserve the right in the future).
Thanks for the tutorial tho on making Steem work with it too, but I'm only buying Steem and powering up right now, trying not to spend it.

Very nice how-to Craig, think that is very helpfull for a lot of Steemers!

I'm gonna get myself a shift card as soon as I can. Wirex is good but they really don't have the service standard that would make me happy. Shapeshift has been less than stellar too, though they are pretty good.

That's pretty good buddy. Nice video.

it's easy enough to do by scraping the blockchain for shapeshiftio or blocktrades vs poloniex or bittrex. I'd quite like to see those statistics, actually.

Are these numbers not already being published? It wouldn't be hard for me to modify one of my existing scripts to get this information. Maybe it's not being published already to avoid witch hunts?

Do you have any specifics on how you would like the data laid out? I think it would be a bit of disservice to not show both the incoming and outgoing. Perhaps a table with 3 columns for each exchange in, out & net +/-.

just search for the usernames of the exchanges and otc changers like blocktrades and shapeshift, in the memos of users.

Yeah I know how to get the data. I'm just pondering how to output it and do people justice. Like if I just published money going out to poloniex and others but didn't show you the money coming back, it could make an active trader appear to be selling a lot without ever showing buys. If I just show the net amount it could miss big traders that with zero sums.

What will add some complexity is the exchange to exchange transfers which I will have to figure out the identity of the trader through use of the memo key. I've noticed some traders transfer directly from their Poloniex account to their Bittrex and vice versa so I'll have to map users to memo keys.

well, if it's necessary to identify the flows sources and destinations to that detail... but simply identifying the amounts that flow in and out, that still would be useful information.

Hmm this article goes counter to what I thought I knew. Maybe someone can help me out with a few questions I have.

Doesn't shapeshift and the likes dump it on the market automatically too?

If not, why are these trading desks assuming the extra risk on behalf of steem? Doesn't seem like something a good trader would do. If they aren't converting your steem to btc, usd or some other reserve currency right away then they are speculating on steem and so far that speculation isn't doing so well. Is it just that their "dumping" on the market is done with bots that chop the orders up and make it more palatable to market?

I don't think this advice is good for the small dolphin or minnow cashing out a few hundred SBD they made with some stellar posts. They aren't going to be pushing any market scaring volume and will get a much better price on poloniex or bittrex than shapeshift will net them after the massive fees (10% now?) are applied.

I think this advice is more for the elite few at the top.

Hey!

Doesn't shapeshift and the likes dump it on the market automatically too?

When you say "dump", no they don't have an open sell order that just dumps it all. Most of these companies go in both directions, so they likely hold and hedge in a bull market, they also sell back to customers who want to buy. Every day or week, they probably settle on an exchange or sell large blocks to other companies.

Also, they buy/sell dozens of pairs of even more immature currencies than Steem.

For a small seller/buyer it does not make a difference, however I never recommend keeping money at an exchange.

"however I never recommend keeping money at an exchange."

Agreed, they are just a stepping to stone to my cold storage.

Thanks for the info.

FWIW on another coin, when using Shapeshift as an experiment, I saw a sell order of the exact amount I sent them immediately after it had one confirm. I haven't looked at the behavior for Steem yet.

in my dealings with shapeshift, i can confirm that they do not make their settlements unless they have to. shapeshift has often not been able to buy as much steem as I want to sell to them, and these are generally small amounts.

I don't think it is as profitable, at least not yet, to run these multi-crypto OTC dealer businesses, but I think they probably are doing ok. They basically act as buffers between the in-and-out of the various cryptos out there. I hope more of them spring up, because I hate dealing with exchanges.

I tend to agree that from a Steem price perspective, this is more important for someone who wants to sell a lot of Steem versus someone who is selling 100 or so Steem. It's very important for someone who wants to sell a lot of Steem to do so very carefully to avoid depressing the price during their selling or they will experience a significant loss during their trading (and also cut the value of their remaining holdings), and the instant exchanges tend to be better equipped to do this efficiently.

The advantages for the smaller seller are more in the safety and convenience associated with the use of an instant exchange. Unfortunately a lot of traditional exchange users find themselves ultimately leaving a lot of funds on that exchange, only to eventually experience a painful loss when the exchanged is hacked and they lose funds. I've personally lost funds through exchange hacks on four different occasions, so this happens a lot more than newcomers to crypto realize.

Thanks for the added insight. I find the complexity of what you do fascinating and mind boggling.

I think my problem is not viewing it from a well capitalized position with a steady stream of clients.

Yeah, I got absolutely killed from the bitfinex hack. It's soured me against exchanges pretty much completely. OTC dealers is all i want to deal with now. At least until the exchanges have enough trading volumes that they don't spike 5-20% once or twice a month and wipe out margin positions. Liquidity is essential for margin trading. Cryptos, none of them, have it yet.

I think shapeshift and blocktrades accumulate capital and only go on the exchanges when the balance gets out of kilter. So they are not taking risks, they just are more liquid.

How is accumulating a highly volatile and incredibly immature currency in constant decline not taking on more risk? What kind of timeframes are we talking here for accumulation? I'm having a real mental block getting over that hurdle.

I must be missing something.

they accumulate lots of these from many different cryptos. it balances out, i'm pretty sure. they probably have to trade things in and out as they move against each other but because they hold a big bag of everything, they are not influencing the exchanges as much.

I would love to see the algorithms monitoring that and what happens when there is major market move that skews their books. I'm picturing one of those red siren lights going off in an office. Maybe it's as mundane as some trader uttering, meh, and then presses a button though.

yeah, from what i've seen with shapeshift, the red light sounds like about how they operate. 'balance approching zero, warning, warning!'. about 1/4 of the time i go to do an exchange through them, they say they can't accept even my small trades. and nobody works night shift there.

Let me explain. All the simple instant exchanges mostly provide operations via Poloniex or Bittrex. Our service http://Changelly.com also do the same. We have deposits on exchanges and on our proxy wallets to make exchanges fast for users. For each exchange operation we make the hedge deal on Poloniex and take a small fee for this. You can have a look, how it works, and how do we calculate rates here:
https://steemit.com/money/@changelly/how-changelly-suggests-the-best-exchange-rates

OTC dealers don't have to make orders as often or as big, because they hedge.

Actually, that makes me think of something... so, when is the crypto-hedge-fund going to be a thing? They would be very helpful partners for the OTC dealers.

Alt coins crypto market is very volatile. In this case to prevent risks dealers must have hight commissions and rates should be differ up to a few percents from Poloniex exchange provider. I can't say for all the OTC dealers, but on http://Changelly.com we have only 0.5% fee. That's why almost all the deals are hedging, especially for high amounts to exchange.

One thing that the Steemit community has going for it is that there's not much focus on price. Check out R/bitcoin from a few years ago and every day the price moves by 5%+, the whole front page is posts about price. It's rare that posts on price make the front page on Steemit, and I hope it stays that way.

I couldn't agree more!

They are giving for 1 SBD 0.00133594BTC... in Bittrex u can get 0.00147000 BTC... I understand ur point but it is a bit below the market. Not a good incentiv to use it. Anyway u got my up-vote, did not knew about Blocktrade

Mostly all the instant exchanges provide operations via Poloniex or Bittrex. And take a reasonable fee for this. But it seems that blocktrades have their own order book and matching. Their trading bot holds a big spread, that's why they have such prices. But they are build in steemit and many users use them as default option to buy steem/sbd.

Don't forget slippage...

That's only really an issue for big buyers/sellers. In general smaller traders will get better prices on the exchange than OTC.

Yes, this article was written towards larger orders, usually on greater than $1,000 buys or sells.

Ok, but then you should make it clear in ur post because ur followers, Im pretty sure, are mostly small fishes ;)

But even slippage can be mitigated by layering in sell orders. Of course, even a limit order is going to avoid slippage. It's just going to put a lock on the price until it gets filled.
I get the concern, but it doesn't seem wise to pay for the premium service even if you're dumping large quantities, unless you just don't care about paying the convenience fee. IMO, it's steep enough to make selling in layers or small tranches on an exchange the wiser course.
OTOH, even if you face a little slippage on an exchange, is it enough to make up for the Blocktrade fees?
I guess the question is, "How much am I willing to give up to try to help protect the price of Steem?"

"How much am I willing to give up to try to help protect the price of Steem?" is a good question :)
... but this is more at the end a post for whales ;) ...I do not think fishes and dolphins have enough power to put in danger the price and for sure many need the extra bit-cents that you loose exchanging your SBD in Blocktrade right now.

Of course. I was offering the comments as I would see it through a whale's eyes. IMO, it's simply unwise to set aside potential gains. There is a point where it may be wise though, depending on how much they're dumping and what the market is doing at the moment. If I were a whale, I'd have to ask myself that question every time I sold. And I'd be very reluctant to sell through a service that was tapping me for more than 1%.

hmmmm... could be, but not when u look the market, in Bittrex for example and there are selling walls of 638.13105397 SBD at 0.00147000 BTC, then 992.94004987 SBD at 0.00146000 BTC and also 1000.00000000 SBD at 0.00145001 BTC. That is what I means for a bit under the value of the market ;)

It is really naive to think that OTC market is something different than exchange. It is exactly same thing. Only one different is that you do not see participants.

I will tell you one ugly truth. There are not traders on the steem market. No speculators. All people who trade steem are pure amateurs. Why? because every single professional trader already know that steem valuation is unrealistic. There is no way how to make money on the falling market when you have nothing to sell.

Do you really think that traders will invest their time to trade small and corrupted market like steem. Not at all. Traders are not the problem because they are not even involved. Only problem is that people want to cash out. You guys killing your market by your own. You can try to convince people to not sell for a while but not forever. Steemit has no value.

Do you want proof of this hypothesis ? Look at your post. Do you think that you are right on this about OTC. The fact is that you are not. Look at your reward for this post. Almost 800$. Do you think that your post is 800$ worth.

I can show you another example. Look at the guy who made almost 60k $ by posting nonsense "steem trading" spam. He produce same type of spam every day. Where is the authority to stop this guy? Nowhere.
How do I know that guy is spammer. I know because trading is my day job for more than 8 years, and his posts are about "trading" :) :) :) . Almost every single steemian knows that guy is a spammer. People are re-steeming and up-voting his posts every day. Even whales are involved :). Very nice example that steemit has no chance.

Simple question at the and. Are you willing to pay real money for same content as you see on the steemit every day?

If No , then steemit has real problem. It is better to power down or force people to think about their behavior. Not forcing them to use different cash out method. This doesn't make any sense.

This is great Charlie! I have not sold any Steem but I did not know about the Bitshares option. Thank you for the education!

Definitely gonna steer clear of exchanges in the future! I've been frustrated, watching the price plummet in a matter of hours on exchanges whenever I try to sell a couple of Steem. Blocktrades send like a much better option!

Hi @beowulfoflegend, you are welcome to try http://Changelly.com - we offer better prices on the market, than Blocktrades. You can have a look, how does it work: https://steemit.com/money/@changelly/how-changelly-suggests-the-best-exchange-rates

Thanks, I'll certainly take a look!

The relationship between Steem trading volume and Steem prices is a complex one which, when understood properly, can lead to many insights into the Steemit soul itself.

I agree on your #1. point. I hope this happens.

With a top heavy SP pre-mine this was always destined to happen anyways. People initially join Steemit to EARN $'s too - not BUY them - as we may first think.

But time will tell Charlie. I hope you are right. OK, my mini-rant is over for today - I have a 5000th post to write. I shall leave thee in peace to improve things around here! Best of luck getting this SP whale pre-mine sorted out! I still believe 1-5% of all SP MUST be retained by whales to market us out of this mess! Hopefully we can power this marketing process too!

I feel like people are slow to realize the potential of what Steemit is.

Here, they reap the rewards then get excited, cash out, but keep coming back. Those that don't get rewards and can't be bothered putting in work, leave. And, then there's the believers among us that power up and keep the lights on, who're dedicated to the platform and bring value to it.

Once every body agrees how supercalifragilisticexpialidocious Steemit is, buy walls will come rushing in.

Honestly, I think we're almost there.

Nice post @charlieshrem. resteemed

Interesting view on this. I was under the impression that using the top exchanges gave better prices when trading.

I generally use shapeshift.io I did not realise that they do not affect exchange prices as much, so I'm pretty pleased to learn that it's a good thing. I have a wirex card so it's very convenient, they have already got the link to generate a shapeshift trade on the e-coin.io site.

So now I'm also going to be advocating the use of shapeshift and blocktrades. Thanks for the info.

All the simple instant exchanges mostly provide operations via Poloniex or Bittrex. Our service http://Changelly.com also do the same. And of course, each deal moves the market price. You can have a look, how it works, and how do we calculate rates here:
https://steemit.com/money/@changelly/how-changelly-suggests-the-best-exchange-rates

They do, but they hold a buffer of funds and adjust them. In fact, idk about blocktrades, but shapeshift probably need more people and a bigger pool. They are OTC exchangers, like the change bureaux that you see in especially capital cities and anywhere near large airports. Their money changings do not affect the exchange rate that much, because their business is all about instant exchange. So they hold a big pool of all the currencies.

Thank You, useful information for an Amateur like myself.

It's funny, I was starting to assume this exact issue. Traders on exchanges make money based on volatility. If we want the rate to be more stable, we need to stop allowing the traders to affect the price through the exchange. I was already planning on switching to exchanging on ShapeShift with my next power down. Sure, maybe the rate is a little lower, but considering the long term strength it can give, I'll happily take a little less.

Hi! Every exchange affects the market price. Almost all the simple instant exchanges operates via Poloniex or Bittrex. You can have a look, how it works: https://steemit.com/money/@changelly/network-fees-and-suggested-minimal-amounts
And also welcome to try our service http://Changelly.com

Thanks. Glad I've been using Shapeshift. Their process alone with not having to go through annoying loops like everyone else was enough for me to use them from the get go. Now, I'm feeling good I made that decision. Also, thanks for reaching out to other Whales.

Hi @dailybitcoinnews, you are welcome to try our instant exchange http://Changelly.com I think it will be nice to have an option =)

changelly gives a great rate too! I only have small amounts but IIRC you can email for amounts larger than set/standard?

Thanks @radioactivities for mention Changelly! Hope you are satisfied by our service!

I especially appreciate I can view the exchange rate I'm getting very simply/immediately! And best value SBD!!!

Awesome post lots of knowledge. I definitely agree of staying clear of the exchanges.

This assumes blockrades (and shapeshift) don't balance out their positions on exchanges. If that's so they risk building up huge positions when there is no balance between buyers and sellers.

It seems that blocktrades have their own order book and matching algorithms. But as for Shapeshift, they provide exchanges via Poloniex or Bittrex. You can see balancing transfers in their history. As for our service Changelly, we do the same to offer best prices on the market at the given moment. You can have a look, how does it work: https://steemit.com/money/@changelly/how-changelly-suggests-the-best-exchange-rates

Thanks Charlie. I wasn't aware of this. I've been doing all my trades on the exchanges. I didn't really know about how block trades was different. I'll check them out the next time I'm going to do a trade!

Hi @timcliff! You are welcome to try our instant exchange service: http://Changelly.com I think it will be nice to have an option =)

Thanks for the very informative post!

Good advice for whales to avoid exchanges, thanks for getting this out there. I hope they heed your advice. Would suck to see this platform destroyed by too much sell pressure.

Thank you for posting.
Principle....Freedom, the right to fail...the right to suceed.
Freedom and the right to privacy/property stand or fall together.
Perhaps these principles dovetail with your article.

I'm a new steemian. I've recently started investing small amounts of my own cash with a partner as we can afford it. I'm assuming eventually the prices will start rising again. Now is the time to invest.

I liked your article. Helps you like mine ♥ @siams

I invest in the idea of the Steemit platform. If people want to trade, they should invest in BTC, ETH etc..

The value are the infomations and communications :-) @ajaub1962

Thank you for your statements!

Charly. Thank you for keeping at it and supporting this community.

The issue with this is that the price on exchanges is better. when you use blocktrades rail that is nicely integrated into this platform the price difference is often 10%. That's a lot. The market should also not be less affected by which rail you use. The most important factor is whether you sell or buy. Traders just cause short term fluctuations but in the end it matters what the masses (in terms of value) do. This in turn depends on the value that steem provides.

This is why i have proposed my idea to add bounties. please check it out and provide some feedback.

People should simply buy when they think the price is cheap, and try to make a profit for themselves. That will also help the platform the most by creating a bottom and then forcing the price back up.

Way to simplify the issue
But I can't agree with the fact that an absolutly free marketing is the best thing look at what the stock market is doing to the value of the dollar.
Good article I think the issue is bigger than this

I wrote an article about people dumping massive loads of coin yesterday. At the same time I bought in a bunch last night after thinking about it. I didn't mean it to scare people just to try to encourage that big guys slow down the rate at which they sell. Then I also realized I had no idea how fast they were selling just that they loaded their exchange wallets. It'll all work out.

Great post, can I translate into spanish?

Hey Charlie

Thanks for the info, I just want to bring up the point that on the steem platform, "government" does try to control the market to some extent, for example payouts are now part Steem and part SBD as a decision to control the peg, which is fine, but serves to highlight that government does already try control a bit so why not try other methods of market aid.

Whales and especially witness whales are basically shareholders or trustees of Steem, when a shareholder of a company dumps his shares the market spooks.

What if when Microsoft was still young, Bill Gates started selling all his shares, not just once off but weekly with no end in sight?

As trustees we need to think to the interest of Steem, as a trustee of property body corporates I don't even get paid, it is a service to the body. Here we have the priviledge of being paid, so we could try help the market.

It is scaring alot of people to be honest, I run successful campaigns here on steemit and am all in for Steem and even I am starting to get a little spooked,

Granted I don't have the same direct line of communication as you do, so I won't know what is really going on in the inside, but from the outside it looks scarey, I'm just talking from the peoples perspective and what people say to me in passing.

I had an idea which I expressed to another witness, what if whales, especially witness-whales. do a round robin, example the top 20 power down 5 a time, 5 per week so not everyone is dumping simultaneously.

The price will recover and the next batch of whale sellers will be able to sell at better prices .

What do you think of this idea?

I think that Bill Gates is smart enough to sell his shares by non marketable orders. Other thing is that Microsoft was a company with clear vision and value. Steemit is platform where people get money no matter what content they share. this is main problem of Steemit. And economy of steemit is next big problem.

I haven't used Blocktrades since the early days, the price discrepancy was negatively weighted in relation to Bittrex, has this changed?

Cg

Many people do not know what 2 years and 104 payments let me explain:
Steem Power has a background of maturing two years and to convert it back into steem need to 104 payments for your articles so fast you need to convert power into steem steem and to do items, try to get votes quickly.

Many people do not know what 2 years and 104 payments let me explain:
Steem Power has a background of maturing two years and to convert it back into steem need to 104 payments for your articles so fast you need to convert power into steem steem and to do items, try to get votes quickly.

nice post....

@charlieshrem Great post! You do have an embarassing typo though. Not trying to be a grammar nazi but...

they are ammeter and professional traders
unless they are measuring amps I'm guessing you were looking for amateur. :D
Excellent post!

nice post..

Hey Charlie,

I use the BlockTrade site services a lot. For non crypto based Steemers it is the best way to go, I think. Only used a Steem related exchange once, when Blocktrades seemed to be out of order. After that never again. I like it plain and simple.

Have written some how-to's about using Blocktrades, but I won't spam your comment section with it. Search and you wil find... For me Blocktrades is the best service for Steem related exchanges. Without the need to deal with trading.

And just yet I also transferred SBD to SP through the Blocktrades services, thanks for making me aware of that. Now I like it even more.

Have a good one!

Hi @oaldamster! You are welcome to try our instant exchange service: http://Changelly.com - better rates for STEEM/SBD to BTC/ETH/etc.. I think it will be nice to have an option =)

Hi @changelly,

Thanks, I will have a go at it. :-)

Newbie Steemian here. :-) My background is in Forex and options and now familiarizing myself with BTC. I was wondering if the Swiss Franc debacle in early 2015 could happen on the Bitcoin exchanges? Stops were taken out way past 1.2 and plummeted down to 0.7ish.

Looking at Blocktrades current prices.

I can buy a Steem Dollar for $1.07
I can sell a Steem Dollar for $0.78

On Bittrex there's a bid for $2000 SBD at a price of $0.91 with around $7300 on the market down to the $0.78.

Great post!

Steemit facing overstock easy earn so easy to dump its go like that . always

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@charlieshrem, many thanks for mention our service!
Dear steemers! You are welcome to try our instant exchange, that lets you convert STEEM/SBD earnings to any crypto like BTC or ETH. We have a handy interface and offer the best rates on the market at the given moment. Don't hesitate to ask any questions here, please!
https://changelly.com/


Hi @charlieshrem, I just stopped back to let you know your post was one of my favourite reads today/yesterday and I included it in my Steemit Ramble. You can read what I wrote about your post here.

Wow. How did I miss this post?

You are 100% spot on. Anyone that buys or sells any significant quantity of anything should do OTC trading - a large amount of BTC trading (the really big deals) happen this way and they don't impact the price. This is how the big guys and the people who are already wealthy make their buys/sells. I first found out about it when I read about some people who were moving from trading stocks and shares and diversifying into Bitcoin.

They wanted to invest millions but knew that if they made a buy like that on an exchange it would likely cause a sharp rise in price (increasing their buy in cost before they had completed the trade) followed by a likely compensatory fall.

The end result would be that they would actually lose money and destabilise the price by doing this. They were using special brokers that are not available to us regular people but the principal is the same and we have the options of Blocktrades/Shapeshift etc.

The problem is that all of us small traders in the end give the same effect as one massive trader. The market is a balance between differing interests and if you are interested in minimising your effect on the market OTC trading is a great way to go.

I hadn't really thought about using Blocktrades for my purchases but was instead exchanging my bitcoin/other cryptos to SBD on exchanges. Next time I will see if I can just do a direct conversion via Blocktrades or if they aren't able to do it I will try Shapeshift.

This is even more important for those powering down though because each time they sell on the exchange markets they potentially put downward pressure on their own next selling price - in essence harming the value of their own assets.

Mmmm interesting post, Im still learning about all of the crypto world so some of this is still confusing for me but I am starting to get it the more I read. Thanks for the good post.

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