@tobetada wrote in his HBD Pump Report:
Note, I actually don't know if it would always be a profitable action when one starts the conversion at a price above $1.05 or what happens when the price only briefly goes above this threshold and for example stays 99% of the time at $1 or under it for the remaining conversion time window (if you know let me know :)
OK, I know.
TLDR: It is still profitable even if the price spike over $1.05 is brief. Unless you expect HIVE to crash.
I suppose you trust me so you can skip the rest and upvote now.
Once You Convert, Forget Future HBD Price
First of all, HBD does not have a dollar price.
As the most convenient way of profitting from the HBD pump is to buy HIVE on internal market with HBD, we can pretend that you can divide any HIVEUSD quote (such as HIVEUSDT from Binance) with HIVEHBD from internal market to get HBD "price". Whenever this text says "HBD price", you should see the quotes around the P-word in your mind.
Secondly, conversion is not the profitable action.
When Binance says HIVEUSDT is 0.5 and you buy HIVEHBD at 0.4, that is the profitable action. As the HBD price is $1.2 (=0.5/0.4) and we "know" HBD is going back to $1 sooner or later, we make 20% on the trade.
We are now stuck with HIVE and noone is releasing their HBD cheap for us. Noone but the blockchain. So we are going to pay the 5% fee on conversion to stay in the action. Or maybe we pass. Let's think it through.
Future HIVE Price Matters
You have some liquid HIVE in your hands and wondering if conversion leaves you with more HIVE in 3.5 days than now. Let's do a few WLOG assumptions:
If you click convert, you are going to instantly sell the HBD you get for the current price (so you end up with 0 HBD and some liquid HIVE again).
You are down to 0 HBD and there is no reasonably priced HBD available to you (otherwise you sell w/e HBD you have/can get for HIVE before converting).
For practical reasons, I also artifically presume that locking up some HIVE as collateral has zero opportunity cost. Therefore the value of your position after conversion is whatever HIVE you get on the spot (by selling the HBD you instantly get) plus whatever HIVE is going to be released in 3.5 days. Feel free to adjust if you have other things to do with your liquid HIVE).
Note that the full round (conversion and sale of HBD) takes little time and you end up in the pretty similar spot (just with fewer liquid HIVE) so unless something big happens in that short timeframe you are going to convert again (as long as the original conversion was evaluated as good) until the amount of liquid HIVE is insignificant.
Same old game, new players every other day. I'll never keep substantial liquid HIVE or HBD around.
!PGM
!PIZZA
BUY AND STAKE THE PGM TO SEND A LOT OF TOKENS!
The tokens that the command sends are: 0.1 PGM-0.1 LVL-0.1 THGAMING-0.05 DEC-15 SBT-1 STARBITS-[0.00000001 BTC (SWAP.BTC) only if you have 2500 PGM in stake or more ]
5000 PGM IN STAKE = 2x rewards!
Discord
Support the curation account @ pgm-curator with a delegation 10 HP - 50 HP - 100 HP - 500 HP - 1000 HP
Get potential votes from @ pgm-curator by paying in PGM, here is a guide
I'm a bot, if you want a hand ask @ zottone444
I gifted $PIZZA slices here:
@torran(2/10) tipped @jelly13 (x1)
Join us in Discord!
Such a valuable post.
important to recognize (actually see) that an HBD increase is just a different neutral price for HIVE than all the indicators are telling our eyes. The internal market represents this neutral price, meaning in some ways its a futures market for the price feed 3.5 days in the future..... 🤔
the HIVE>HBD conversion is a(n overcollateralized) leveraged bet on this way of interpreting the internal market.
The "best" time to do HIVE>HBD conversion is after the HBD "pumps" but before the HIVEUSD pumps, because the part you can control of the profit is determined in that moment.