HIVE is Heading Skywards: Speculative Bubble, or Seeking "Fair Value?"

Yesterday, I found myself reading a post by @steemmatt, entitled "Does This Hive Pump Make Sense?" and I ended up leaving a lengthy comment, which I'd like to expand on.

A good number of us have been on this rollercoaster before... and a lot of us have grown pretty cynical and skeptical.

But let's poke around in this, for a bit... because maybe this pump does make sense.

HIVE is Shiny, New and Exciting!

Being one of the ("traiterous," to some) people who's still active on both chains, there's little doubt that the majority of the best of Steem are now focusing their energies on Hive. I am, too... I think we have a real opportunity to build something!

This project started with a LOT of public attention, going back all the way to the February 14th announcement, and then thanks to the whole Justin Sun-TRON-Witness debacle... which ended up being watched by much of the cryptosphere.

Current pump aside, there's little doubt that Hive is currently a hot news property, and is being watched by a substantial number of influencers in the crypto/blockchain space.

That's just a bit of totally factual background. But wait, there's more...

An Impressive Move

All things considered the developers, witnesses and other participants pulled off an impressive feat in forking the chain to a completely new destination with only very minor hitches.

For those of you who have been playing this gig for a while, consider that most previous Steem hardforks have been various degrees of disastrous... disrupting the community and even breaking the chain requiring replays, and sometimes messing up the environment for as much as a month.

Yes, and sometimes more than that... but let's not split hairs.

So now we have this group of "free spirits" (for lack of a better term) and they pull off a fork with barely a hitch. Something that didn't seem to happen while under the control of Steemit, Inc.

This is ALSO newsworthy.

Censorship, Quittings, Locked Accounts, and things...

Of course, then Hive stays in the news because of the various censorship measures happening on the Steem blockchain.

Large Steem players' accounts get frozen. Somewhere in there, most of the old Steemit, Inc. staff quits.

Meanwhile... even back in early April... the price of Hive actually starts trading higher than the price of Steem.

Again, significant because history seems to suggest that forked "copies" seldom gain the traction of the "original," let alone achieve valuations higher than the original.

One more time, something very newsworthy.

What's My Point Here?

My point is that even before the first "blip" of the current moonshot rise happened late on April 22nd, we were already working with extremely fertile ground.

Meaning, that only a small piece of significantly positive news would really be required to set things in motion.

Interestingly enough, the start of this rally also significantly correlated with the one-month mark for Hive, and I know I was among some (shame on us!) who were taking a more cautious approach to Hive and giving the whole thing a month to see if it would show immediate signs of turning into "another WhaleShares" (no disrespect intended).

And Then That Moment Came: Huobi AMA

It's interesting to note that the first upticks of the current rally started during the AMA session with Ciara Sun and Huobi Global.

In restrospect, I would say that a few people thought to themselves "this is going to turn out well," and took an intuitive flyer and bought Hive... well ahead of the formal announcement that Huobi would open trading for Hive and was offering a 100,000 Hive incentive for deposits.

And we were off to the races!

But let's keep in mind that Hive went nuts on Bittrex about 36 hours before the first Huobi trade ever happened! Why does that matter? Because those trading on Bittrex don't stand to gain anything from the Huobi incentive offer, other than a chance to ride the price up.

How Much Huobi, How much Bubble?

Of course people have a way of behaving like sheep...

But let's wrap some perspective around this circus: Huobi Global offered up a 100,000 Hive incentive to be split many ways, and let's look at that in the context of alleged 24-hour Hive trading volume in the region of US $125 million.

That's an awful lot of risk taking if it's purely for a shot at a small fraction of a 100,000 Hive pot, don't you think?

As I write these words, both coinmarketcap and coingecko seem pretty aligned with the going price for Hive being about US $0.90.

Is This Really SO Unusual and Deeply Speculative?

Is the current volume really "unusual?" Are we already in a "bubble," barely 30 days into the life of Hive? Should we all be running for the hills and expecting a crash... perhaps because the majority of the action is happening on a single exchange?

This is where I'm going to expand on some of the points I made on *@steemmatt's post... and please keep in mind that I am drawing on experience far beyond the world of crypto, back to my days in trading speculative tech stocks, up to 25 years back.

Sometimes it's just time for an undervalued property to make a big move, because people realize that if they don't get onboard NOW, they'll miss a great opportunity.

Think About THIS...

Let's examine the bigger picture and consider whether the profoundly sluggish volume of Steem in times gone by is actually what is unusual?

Furthermore, are we possibly just SO used to scraping bottom that this feels weird?

As I wrote in my comment, I remember back on Steem that I would often feel baffled by the fact that compared to other cryptos, Steem might be ranked 50th or 60th in market cap... but would rank 150th or 200th (or lower) in daily trading volume. And this in spite of huge amounts of Steem being held on exchanges, and repeated calls by services like Weiss Ratings, stating that Steem was "among the best."

Why?

Consider that LOTS of top 100 blockchain/crypto projects habitually turn over 20-50% of their total market cap every single day in trading.

When I checked our former arch-nemesis TRON yesterday, the 24-hour trading volume was $1.4 billion against a market cap of about $950 million.

Why should Steem... and subsequently Hive... be stuck with eternally anemic volume? Why should it?

"Fair Value" and Critical Mass

As for the price rise, yes it's rather steep... and I have little doubt that we will see somewhat of a selloff when the Huobi Global promotion ends.

But there's more here than just a catchy promotion.

Consider how much Hive has been in the news; consider the general activity level, and the number of Dapps here... with new ones added practically daily. And then just the broader promise of the bold experiment of an independent decentralized project, backed by an enthusiastic and dedicated (and often very LOUD!) community, and what do you have?

Could it be... that we have a grossly undervalued project?

Consider that there are dozens of blockchain projects out there with little more than a White Paper and only the flimsiest of use cases, and yet they are worth 10 or 50 times what Hive is...

What if we're NOT actually "in a BUBBLE" and getting into an overbought situation, but are actually in the process of establishing "fair value?" I've seen this happen multiple times with undervalued tech and biotech stocks suddenly taking off from undervalued to fair value and beyond.

Water Always Finds Equilibrium

Will there be a pullback? Pretty sure there will, but it wouldn't surprise me if we see $1.00-$1.50 Hive before that happens substantially.

How far will that pullback go?

Well, that depends on whether Hive "Delivers the Goods." Which means this is the time for everyone here — from a developer with a dream for a dApp to every content creator — to step up to their "A Game" and keep the momentum going!

This is not the time to sit back and rest on our success... but the time to build it.

In my opinion, a central part of Steem's downfall was the failure to deliver; on promises, on features, on promotion, on many things. We have a chance to put that right. We have a right to prove that the higher valuation is justified!

And the reward for for doing that is $1.00, $2.00 or maybe even $10.00 Hive not just as possible, but as representing that Equilibrium Level known as "Fair Value."

So Now, Let's Have Some FUN!

I'm afraid I ended up writing a little more of a "dissertation" there than I originally had in mind... but this is also the most enthusiasm I have felt since the early days of Steem... where it really was possible for an "ordinary schmoe" like me to create a meaningful post and see it fly organically up the trending page...

But that's a whole other story!

Thanks for reading, and have an awesome evening!

*Comments, feedback and other interaction is invited and welcomed! Because — after all — SOCIAL content is about interacting, right? Leave a comment-- share your experiences-- be part of the conversation!

(As usual, all text and images by the author, unless otherwise credited. This is original content, created expressly for this platform.) Created at 20200426 19:06 PDT 0035/1263