[reply quoted from below]
And what happens when the bulk of the users pay a higher price for the same stake? The early adopters become the new whales and so we have the same distribution problem.
What happens is that there are more users/investors each buying the same stake for higher prices. Previous holders are willing to take profits on a portion of their stake so they own less stake (%), although the value of that stake may still increase. The distribution flattens out from both sides.
That's why demand-driven high prices are better for distribution than low prices. Low-ish prices generally lead to either volume dropping off to next to nothing, in which case stake distribution is largely locked in place, or most holders dumping while a few true believers or pumpers accumulating all the stake at low prices (in which case distribution gets worse).
We are down 98% from july because the whales decided the price was overvalued, simple as that.
Whales would be happy to sell at any price (down to some minimum where some whales will feel they might as well just hold on and hope for the best), and happier to sell at higher prices. The primary reason we are down 98% is that there isn't demand to buy. The site (and blockchain platform) isn't growing, isn't large in terms of existing (or remaining) user base, and doesn't show all that much visible promise in terms of development. Maybe that will turn around at some point, maybe it won't.
The thing is that adoption takes time, most users will probably start using the site when the price is already very high. This creates a problem where there isn't enough whales to upvote all the content which will be spread a lot and in a lot of different languages. Add to that the fact that late adopters will clearly be at a big disadvantage, imagine if the price is 100$/steem when people adopt it, it means those people will have to pay a 1000 times higher for the same stake, so you would have to be very rich to get any kind of influence and so we are back to square one.
I have noticed one thing is that there is even less buy order than before the fork, I think people are waiting for the price to go lower, they don't want to be dumped on by the mega whales.
It's crazy to think that litecoin or other shitcoin have consistently much higher volume than steem, I mean these coins do nothing, steem is really a great innovation, with lots of community support, I don't think developement is the issue because there are some very nice project like busy that are coming.. I think either the FUD campaign made by bitcoiners early on really worked well or the hyperinflation discussion scared people away or it is a perception issue ( if I can post to earn steem why the hell would I buy it kind of thinking) or simply a lack of understanding how it works.
I have invested a bit in steem mainly because of busy, I bought just after their annoucement. I think steemit.com is not really friend/family friendly, not enough privacy and many missing feature. My hope is that busy becomes a central hub with a busy app store ( steem based app) a marketplace and chat. I think people will start to realize the potential of steem when busy launches. We will see, I personnaly am willing to take the bet and buying all the way down :)