Steem, Bitcoin, and many other cryptocurrencies often experience a hyper-inflationary period. Usually shortly after they are launched.

Which, as you can imagine, might be quite a drag on the price.

If the supply is ever increasing, there must also be a corresponding increase in demand to offset the increasing supply.

If there is any dip in demand, prices go down.

A quick look at the long term chart of Steem is a perfect example of this:

https://s1.postimg.org/1eurf1ezcv/Screenshot_84.png

As you can see the price shot way up when payouts first started taking place only to trend down over an extended period of time.

Part of the reason for this was that at that time the inflation rate of steem was very high.

Since that time, the inflation rate has been drastically reduced.

Later on, when we saw an increase in demand earlier this year, we can see on the chart what that did for the price.

The price rallied from a low of around $.07 to a high of just under $3 per coin.

Bitcoin has just passed the 80% total supply mark.

Meaning that at this point, 80% of the entire supply that will ever exist for Bitcoin is already out there.

Check out this chart to illustrate Bitcoin's supply:

https://s1.postimg.org/6stjmkvx7z/bur-768x605.png

This is very important information because it means every new Bitcoin will be harder and hard to obtain. Which means if demand stays relatively constant, prices will go many multiples of where we are today.

If demand were to increase, we are talking about a moon shot for the price.

Steem is not quite in the same position as 80% of its supply is not already outstanding, but roughly 50% of its supply already is outstanding and the same principles apply.

Both coins likely to increase in value?

With each year that goes by, it will get harder and harder to obtain steem, and that is if demand just stays constant. If demand were to increase it becomes that much harder.

Basically, the thought process is the same for both coins, with one (Bitcoin) being in a slightly more advanced stage of its cycle.

Keeping this information in mind, it makes sense to accumulate as many coins of each as you can now, and enjoy the higher prices years later when it gets harder and harder to obtain both coins.

That is my plan at least.

Stay informed my friends.

Sources:

https://www.cryptocoinsnews.com/will-disinflation-bitcoin-lead-long-term-price-surge/

Image Sources:

https://coinmarketcap.com/currencies/steem/

https://www.cryptocoinsnews.com/will-disinflation-bitcoin-lead-long-term-price-surge/

Follow me: @jrcornel

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