The Steemit platform has been awash with both joy and panic in the last few hours as the value of Steem Dollars (SBD) jumps 340% in the last five hours.
The panic stems from the fact that all of the purchases of SBD are coming from the HitBTC exchange alone – where SBD reached a price of $36 – compared to the Bittrex price of $1.68.
Steem Dollars are one of the currencies which the Steemit platform pays out to its users, and some Steemit members are running to count their profits already.
However, all of the chatter in the last few hours suggests we’re witnessing the upswing of a pump and dump. The Steemit platform hasn’t even registered the price gain of HitBTC’s SBD/BTC trading pair, and it’s unlikely they’ll do so until they see what happens.
This has left some Steemit users desperately trying to sell their SBD holdings at a 340% gain, while others are just hoping that the expected dump doesn’t wreak too much havoc on their social media platform.
This morning, SBD coins were valued at $1.74. Five hours later and the value price $7.75.
The last time Steem Dollars reached this price was on May 17th, 2017, when SBD showed a similar spike in price and reached a value of $22.12.
HitBTC only accounts for 18.74% of the trading volume in the past 24 hours, but that’s where the concentration of SBD purchases have been the highest. The HitBTC movements only amount to $127,702 – less than half that of the volume being traded on Upbit against KRW.
SBD had been trading steadily at around $1.70 for months now. SBD coins are supposed to be pegged to around a dollar equivalent value of STEEM tokens – one of Steemit’s three internal currencies.
SBD was set up to act as a buffer between the daily market trades of STEEM coins, and the daily transaction movements which take place within the Steemit platform.
The Buffer Does its Job
A glance at today’s STEEM numbers show what might be a slight reaction to the SBD trades, but by and large has remained unaffected by the activity of its cousin-currency.
STEEM had shown similar consistency to SBD prior to today; and had traded at around $2.30 – $2.36 for the last few weeks.
But in the middle of today’s SBD/BTC trades on HitBTC, the value of STEEM coins jumped suddenly, sharply, but only slightly – recording growth from $2.32 to £2.47.
This only amounts to 6%, and quickly cooled back down to $2.38 within the hour. This short flutter of activity may have been the sudden reaction by Steemit users to the unexpected SBD movements, but the steadying price of STEEM coins suggests that the chain reaction didn’t travel very far.
In the time it has taken to write this article the value of SBD has jumped from 250% to 340%, back down to 250%, and as I close out this article it has jumped back up to 296%.
The fluctuation doesn’t seem to be slowing. Watch this space.
Featured image courtesy of Shutterstock.