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RE: Users Converted Over 1.2 million HBD to HIVE During the Dip this Month
I'm not sure I follow your argument.
The fact that HBD holders converted $1.2 million HBD to HIVE in the current dip proves that using HIVE to guarantee the HBD puts a downward pressure on HIVE.
Isn't this instead an internal demand for liquid HIVE, which sustains prices? And then there's the whole HBD stabilizer project which has in incentive to buy and sell at a loss just to maintain that market HBD price.
I'm in HIVE HODL mode, and I sold HBD for HIVE because I want to hold more HIVE. This is demand, not downward pressure.
0.01297938 BEE
This chart from arcange indicates that several million HBD get converted every month.
I suspect that most of this is from speculators and automated processes like the stabilizer.
As I understand, the conversion replaces a given amount of HBD with an amount of HIVE based on the average of the HIVE price reported by the witnesses over a 3.5 day period.
So, when the price of HBD is below $1.00, speculators can make a little bit of money by converting HBD to HIVE. They then buy HBD with the HIVE and repeat the process.
Personally, I like using the market to trade HBD for HIVE. I only use the conversion if the price of HBD is well below $1.00.
My claim that most HBD gets converted to HIVE is based on the observation that 25% of post rewards comes as HBD. The market value of HBD to HIVE is currently 6.766% .
6.766 < 25/2 .
Historically, the ratio of HBD to HIVE had been lower.
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The downward pressure is seen in the graph of HIVE compared to BTC. This 1 year chart is from CoinGecko.
BTC is pretty much the base currency of HIVE. The price of HIVE pretty much follows BTC, but there has been a downward pressure on HIVE for the past year which makes HIVE lag behind BTC.
Note, there has not been a major scandal at HIVE or anything else to explain this difference.
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Based on your chart, now would be the time to swap from BTC to HIVE while the FOMO gang goes nuts. How are other altcoins charting against BTC? Is this trend exclusive to HIVE or more general among others?
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