Unorthodox Thoughts on HIVE Bear Market

10 comments-0 reblogs
avatar of @travelwritemoney
LeoFinance Badge
5 months ago - 4 minutes read

First, let me just say that things have been worse for the price of HIVE. But, the drop in price for HIVE has many worried that things might get worse. This worries most other crypto hodlers. But, Hivers are only interested in lower prices in order to buy more HIVE. We start looking for loose change in the couch cushions so that we can buy every HIVE we can.

What has led to this price drop is well documented by @ifarmgirl-leo in this post. In short, millions of HIVE are being sold on exchanges, which is making the price dump.

I want to focus on the "millions" part. My problem with HIVE is that it's a struggle just to earn your first 1000 HIVE. Reaching Dolphin and Orca status are also quite the challenge. How could any of us end up with millions of HIVE in our accounts? Unless you already have lots of money to buy HIVE off the market, it is unlikely we will earn so much HIVE in our lifetimes.

According to @dalz, we could potentially see a decrease in HIVE inflation in the coming years. Obviously, it's not a sure thing. His point is that HBD isn't adding much to the overall inflation of HIVE.

But, let's circle back to the "millions". How do we take millions of HIVE off the exchanges to drive up the price?

In my case, the best I could do is buy $400 of HIVE each month. At today's price, that would be around 1,550 HIVE monthly. It would take me 645 months to buy my first million HIVE. Good thing none of you are depending on me to raise the price.

It goes without saying that most of us have little impact on the price of HIVE, individually. Collectively, however, we're to blame for the price dump. If there weren't so much liquid HIVE on exchanges, then there wouldn't be so much sell pressure.

So, what can we do, individually and collectively to fix this problem?

This might sound crazy. We need to stop selling HIVE to cash out our earnings.

What we should do instead is convert our HIVE to HBD, then sell the HBD. This ensures that the HBD stabilizer is able to work, internally, to maintain the peg. If HBD price drops, the stabilizer buys more HBD. If the HBD price goes up, it sells HBD. In other words, by dealing in HBD, it takes the dynamics out of the crypto exchanges and transfers them on-chain.

A better way to cash out your HIVE is to convert it to HBD, then deposit it into HBD Savings. You can then cash out the monthly interest. You would be able to increase your HBD savings and interest payments from your HIVE earnings.

Either of these two ways ensures that there is less HIVE on the crypto exchanges. Yes, we would be flooding the crypto space with HBD. But, we have more control over HBD price than we do HIVE price, especially on outside exchanges.

The end result in doing things this way, as a community, is that it takes HIVE out of circulation, thereby increasing scarcity, which increases price. We need to make HBD the main vessel for cashing out of Hive and for buying into Hive.

Much of the way we deal with HIVE/HBD is carried over from STEEM/SBD where the SBD was incapable of maintaining the peg to $1. Rather than go the extra step of converting STEEM to SBD, then cashing out, we simply sold STEEM. When cashing out, we had two moving targets. It was advantageous to eliminate one moving target. However, with HIVE/HBD, HIVE is the moving target. HBD is a more or less fixed target.

It makes more sense to cash out HBD than to cash out HIVE.

You can convert your HIVE to HBD and have reasonable certainty that you've locked in the price.

Having recently used pHBD and bHBD to cash out HBD, I can tell you that there is very little loss going from HBD to fiat. And, when I buy HBD to put into savings, there is little loss there as well.

Here's another blasphemous idea that has been rattling around in my brain. We don't need a great deal of HIVE for our blogging to operate. If we convert most of our HIVE earnings to HBD, we could build up fixed income while also lowering the overall amount of HIVE. All we would need is a target amount of HP for our accounts. Anything in excess can convert to HBD.

Ideally, we want to encourage investors to buy HBD to convert to HIVE because HIVE is scarce. And scarce HIVE has a higher price than abundant HIVE. We need to make HBD the shuttle that carries value on and off the blockchain rather than HIVE.

I'm up way past my bedtime. I hope this makes as much sense to me tomorrow as it does right now. Good night.

Posted Using LeoFinance Beta