https://i.imgsafe.org/ee46647cee.jpg
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## Introduction
##### Following the successful hard fork last Tuesday (December 6th 2016) and the changes to the Steem/Steemit economic system we have seen a decrease in the power down period from 2 years to 3 months.

This will inevitably lead to a sharp rise in the amount of liquid Steem in existence as we can see from the Power Down statistics courtesy of [SteemDB](https://steemdb.com/labs/powerdown).  

https://i.imgsafe.org/eca4578551.png

##### This coming Tuesday (13th) we will see roughly 7 times as much liquid Steem coming from power downs as compared to last Tuesday (6th).

It is likely that this extra Steem will put a downward pressure on prices - that is how markets usually work.  I have seen some people being quite glum and disheartened by this, particularly given the rises that we had in Steem prices in anticipation of the hard fork.

Let's take a look at some of the potential reasons why people power down:
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## Motivations for powering down:
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1. People who have to pay bills and basically have no choice.
2. People who no longer belive in Steemit (or never did) and just want to exit - "take the money and run".
3. People who want to cash out to buy back at a lower price and increase their holdings.
4. People who are just testing out the system.
5. People who are some combination of the above.

##### I see the exit of people under point 2 as being an advantage.  

These people are draining the system and putting little back in.  The sooner we get rid of them the better.  We saw many of these same kind of people come in and cash out during the July peak.  

Don't get me wrong, I don't hold anything against them but I just don't see these kind of people as beneficial to our long term goals.

##### As for the other groups their actions are very much dependant on the Steem price and general confidence in the platform.  

For example people who have to cash out to pay bills will likely only cash out the absolute minimum if they believe the price will rise. However if they anticipate a future price fall they may try to protect themselves in anticipation of this by cashing out more.  

##### It is a rational behaviour based on future price predictions.

Hence I think that some degree of turmoil is to be expected over the next few months.  I don't think it is a need to panic though.
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## Crisis = Opportunity

>"The time to buy is when there's blood in the streets." 
###### _-Baron Rothschild, 18th century British nobleman and Banker. [Source](http://www.investopedia.com/articles/financial-theory/08/contrarian-investing.asp)._

https://i.imgsafe.org/ee46c13d98.jpg

##### Whatever you think of Rothschild or bankers in general this is a very good point.  I also think that most of us realise that there is some truth to this.

I suspect we have all had times where crises and our actions during them went against the perceived norm of what was "sensible to do" and contrary to that wisdom we ended up profiting from those actions.  

There is also the western meme (which seems to have been [a misunderstanding](https://en.wikipedia.org/wiki/Chinese_word_for_%22crisis%22)) that the Chinese word for crisis is composed of the characters for "danger" and "opportunity".  

##### The reason I think this took off as a meme is because it speaks to an essential truth about risk and reward that Rothschild was alluding to. 

I have experienced it numerous times myself in the 3 years plus I have been in the cryptocurrency space. 
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## The Bitcoin Example

https://i.imgsafe.org/ee46dcbb15.jpg

##### The classic example of this is Bitcoin.  There have been many times where it fell from an all time high and it seemed like it would never recover.

These are the times when the critics and naysayers wriggle out from their assorted hiding places to say "I told you so".  

People start declaring it "dead" - if I had Satoshi for every time people said Bitcoin was dead...
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## Nobody Makes Money from "I told you so."

https://i.imgsafe.org/ee46965881.jpg

##### I remember people telling me I was "mad" for buying Bitcoin when it was $30 because it was never going to fall and would soon be under 1 cent in value.  My response was that I would buy even more if that happened.

To be fair it easy for holders to give up and give in to this kind of thinking.  Derision and the fear of "loss" are powerful factors which put psychological pressure upon us. 

#####  As social animals this kind of pressure as a powerful effect on us.  It can profoundly change our perception of a situation.

That brings me back to one of my own favourite sayings which is an old English proverb:

> "There is no reward without risk."

##### Those people that sold their Bitcoin after it hit the $1 dollar peak and fell are probably quite annoyed with themselves even if they did make a profit.

Ultimately I suppose it depends on what kind of person you are.  For me it would be more troubling if I lost the opportunity to make $1000 into a million as opposed to turning that $1000 in to 1 dollar.
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## A Matter of Framing
https://i.imgsafe.org/ee4712eeba.jpg

##### Sometimes how you view a situation is based on how you "frame" it in your mind.  

_You may see a falling Steem price as a crisis and a reason to panic._

##### I see it as my best opportunity to become a Steem Whale.  

https://i.imgsafe.org/ee46e86758.jpg

I have my buy orders ready to go and suitably low. (Well I'm not just going to give my money away.)

Feel free to fill them.
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## Conclusion
https://i.imgsafe.org/ee46595d84.jpg

##### Obviously what you do with your money and your Steem is up to you.  

I don't have a crystal ball or some magic ability to predict the future.  

##### I believe in Steem and Steemit and I see the future potential.  That is not a guarantee of success though and we must all choose and act for ourselves.  

I will not be powering down any time soon though.
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## Thank you for reading.
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