Might be a good spot to pick up a few more HBDs for those willing to hold...
Either I'm a gluten for punishment or there are some good deals going on right now.
Many of us believe that HIVE will likely go higher in the future, but there is also another coin that might offer some decent returns at the current levels as well.
I'm talking about HBDs:
(Source: https://peakd.com/@jrcornel/transfers)
With the recent drop, they are currently trading for $.75 which means they are potentially offering about 33% upside IF they eventually go back to their $1 'peg'.
I picked up a nice chunk several weeks back when they were trading in the $.50's.
So far, so good as the price has been trying to drift its way back up towards a dollar.
There is no guarantee they do go back to $1, but if they behave in a similar fashion to how SBDs behaved over the years, it is likely only a matter of time before they do.
(Source: https://bittrex.com/Market/Index?MarketName=BTC-HBD)
So, while HBDs may not offer the kind of upside potential that HIVE offers, they do offer some nice potential gains at the current levels with perhaps different levels of risk than say just adding to your HIVE totals.
Plus the fact that the blockchain is no longer printing HBDs should help put a floor in prices.
I won't be selling HIVE to buy HBDs at the current prices, or Bitcoin for that matter, but adding some fresh fiat to something that very likely returns roughly 33% if I simply hold it long enough makes a fair amount of sense to me.
Stay informed my friends.
-Doc
I want some! I'm not really a fan of Bittrex or the other KYC exchanges though.
The market valuation of HBD is usually very close to the conversion rate to HIVE. One of three things need to happen for it to be priced at 1 USD again:
Or we have a combination of any of the above .
I am betting that HIVE goes to 0.16 before any of the other two conditions materialize, which means that at the current prices HIVE has a better ROI than HBD.
Since the fair value of HBD should be around 0.73 the market action seems to suggest that speculators expect it to go up in the near term (it's trading above the expected conversion rate).
Yes I have noticed that as well, and that is a fair point. There is also the possibility that if bitcoin goes up and pulls up altcoins HBD is pulled up 'easier' as their is less liquidity. I feel like I have already seen that happen several times in HBDs short trading history.
So why does the "peg" move/fluctuate if the HBD's are supposed to be linked at 1 dollar USD? (& Please Forgive my ignorance on the peg)
Thanks Doc-
If you convert HBD right now you would receive around 73 cents worth of HIVE. The market "knows" that hence the current price. The blockchain rules will only backup the value of HBD up to a certain point (max 10% of the total HIVE supply).
If the value of HIVE goes below that threshold then HBD will be worth less than 1 USD. If the price goes above one dollar then the market is being stupid (since the blockchain will only give you maximum 1 USD worth of Hive if you convert it).
There is no such thing as a stable currency but HBD should follow the price of one USD in the long term but we should expect fluctuations in the short term.
The peg doesn't move. The peg is always supposed to be $1. However, due to the fact that these things are trading on external markets, market dynamics take over and the actual price sometimes (often?) varies from $1. The fact that it does tend to go back to $1 on a long enough timeline can offer some trading opportunities though.
Oh okay @jrcornel...Thank you for the clarification Sir. I always wondered why we even had the SBD/HBD pairs. And not just sticked to one token...But, I guess that is the way that the system/blockchain was constructed in the beginning. Interesting all the more:)
Last time you got it at a perfect time. The price shot up the next day.
The Hive team needs to make HBD behave more like stablecoin by buying coins in exchanges when the price falls too low, otherwise it will loose reputation just like what happened with original Tether.
I'm reading this just after a nice dump which has crashed it further, so NOW I'm buying!
Good move... looks like HBD is already near $1 again... a 25% gain in two days!
Yep, though HIVE is up double that in the same period... sigh. Good problem to have! :)
Lol, good point. I guess I was thinking compared to BTC which is not nearly up as much during that same period... please keep giving me 25% in two day suggestions tho!
I used some freshly added fiat, so I'll take the 25% gain as well. :)