Hi Steemit, Fede here.
I noticed that many people advise using Blocktrades for cashing out your Steem Dollars (SBD). Now, assuming you decide to do that, instead of holding them or powering up, is Blocktrades really a good option for you?
I did some testing, and it turns out that BlockTrades is probably the worst way to cash out your Steem Dollars (SBD). Surely it's fast, but you will lose a lot due to bad pricing. Let me walk you through the different options and show you the results, then you can decide what's best for you.
BlockTrades
We'll try to move 100 SBD to our Bitcoin wallet.
With the deal they offer, we will get the equivalent of 76.83 USD in Bitcoins. That's 23% less than we should expect, given that 1 SBD should be the equivalent of 1 USD.
Steemit Internal Market
This is a more convoluted process, it requires a Poloniex (or Bittrex) account, and several steps. Let's see how it works.
First, we head over to https://steemit.com/market and place an oder to sell our SBD.
Now we have STEEM in our wallet. We move it to our account in Poloniex and sell at the best rate available.
This turn out to be the equivalent of 81.39 USD.
That's already 5% higher than with BlockTrades. This means that for 10k SBD, with BlockTrades you'd be wasting almost $500 for no reason whatsoever.
Directly with Poloniex/Bittrex
Now let's try to sell directly our SBD on Poloniex. First, we move our SBD there, then sell at the best price.
This turns our to be the equivalent of 85.3 USD, almost 9% higher than with BlockTrades.
For 10k SBD, by exchanging them on Poloniex/Bittrex instead of BlockTrade, you will earn almost $900 more
Final analysis
This is the current status, but things are constantly changing and evolving. Ideally 1 Steem Dollar (SBD/SMD) should be worth 1 USD. The whitepaper states:
It is our belief that these rules will give market participants confidence that they are unlikely lose money by holding SMD purchased at a price of $1.00. We fully expect there to be a narrow trading range between $0.99 and $1.01 for SMD under most market conditions.
This of course assumes a mature currency and stable markets, which is not the case right now. Just last week you would cash about 1.25 USD for every 1 SBD, at a nice 25% profit, due to fluctuations on demand/supply at different markets. Now the situation is reversed.
My advice
- If you have Steem Dollars and want to cash out, don't do it for less than 0.95 USD per SBD. Over time the fluctuations will narrow and eventually the price will stabilize to the 1 dollar. Wasting 23% if you money on BlockTrades because you can't wait a week or two seems rather silly. That is, unless you believe than in two weeks Steem will disappear (I personally don't think so) and that there will be no more liquidity, in which case you should cash out right now.
- If you want to cash out RIGHT NOW, don't do it on BlockTrades. Even if you believe there will be no more Steem in two weeks and want to cash out ASAP, you're still better off doing it via Poloniex/Bittrex, rather than wasting 9% on BlockTrades for no reason.
- If you don't need to cash out, hold it. This gives you the chance to either POWER UP and increase your equity over time, or to cash out when the markets are more stable and you can get a better price.
That's it folks, whatever you believe, I though it'd be useful to let you know what the options are, so you can make more informed decisions.
Happy Steemit!
Where to find me:
Hi Fede,
Congratulations on your success so far on Steemit! I'm a true follower/fan.
I was just looking into what that was and you beat me to it which is 100% perfectly fine since you saved me some research.
Do you by any chance know how often the SBD interests are paid if I hold SBD in my Stemit wallet?
Thank you !
Thank you for the detailed analysis! I'd better hold SP for now.
@federicopistono I really wish this post was up a week ago. Thanks a lot for taking the time to test this out. It saves us a lot of money. I hope this post gets more views.
Only a NOOB would use Blocktrades to cash out!
And that's what I did... :(
It's probably best to hold onto it or convert it to Steem Power and earn interest on it. Unless you are really starving for money might as well use it to help Steem grow
Isn't it better to convert SBD to Steem in the wallet? There's a week delay, so it's not for immediate cash. It's useful when you are sure STEEM price will go up
Nice analysis..
Thank you for the information !
ciao federico complimenti, ti avevo visto anche alla tv, ho notato la stessa cosa su blocktrades e la tua conferma è preziosa, peccato che ora il wallet di bittrex chiuso e non posso trasferire i nuovi steem che ho comprato per fare powerup. Detto questo, adesso mi leggerò i tuoi post, vorrei capire come massimizzare il rendimento del lavoro come blogger su steemit, se non lo hai gia scritto e vuoi darmi una mano te ne sarei grato. Ho un discreto voting power (piu di 3000 steempower con quelli nuovi che metterò a breve) e penso che voterò tutti i tuoi post se saranno sempre su questo livello. Ciao!
I don't know if you're a bot or real, but here's an RSS feed of my posts anyway :) https://streemian.com/rss/@federicopistono
Cheers!