I've been following the HBD page on Ausbit Bank which shows real time information on HBD. This page shows the market value of HBD was $8.49 million when I wrote this paragraph.
The market value of HBD was over $9.8 million before the market dip. The market dip caused people to dump over a million in HBD. This drop was confirmed by the financial report by @archange . Look at all the HBD holders abandonning HIVE.
The incentive is for users to convert HBD to HIVE when HIVE is low. It appears that the HBD holders converted their HBD to HIVE when the price was in the low $0.30s. Converting 1.3 million HBD to HIVE created about 4 million HIVE.
It is likely that the HBD holders dumped the majority of this converted HIVE onto the open market.
The mass dumping of converted HBD put an enormous downward pressure on HIVE in a weak market.
The $4 million in HBD savings is currently generating $720,000 HBD. Most of this HBD will be converted to HIVE and dumped on the market.
The high interest on HBD creates a tremendous downward pressure on HIVE.
The high interest on HBD has created such strong downward pressure on HIVE that HIVE has fallen at a rate faster than BTC.
Because of the high interest on HBD, I no longer feel comfortable suggesting that people invest in HIVE. For that matter, I no longer feel comfortable suggesting that people blog on HIVE as I believe that the users of HIVE should invest in HIVE.
Lending HBD at Junk Bond Rates Makes HIVE Look Like Junk
Apparently the reason that the witnesses are putting HIVE though the pains of junk bond interest rates is that the witnesses believe that a high interest rate makes HIVE look strong.
Leading crypto platforms like LUNA and FTX were centered on derivatives that return outrageous interest rates.
Yes, I understand that this is the same model that led to the explosive growth of Enron.
But the equities built around this model fail.
When sophisticated investors see a platform borrowing at junk bond rates, they know that the platform is junk.
Lending HBD at junk bond rates makes the platform look like junk.
** HIVE Has Been Hemorrhaging Users
The Usages Report by arcange shows that HIVE has been hemorrhaging users since the decision to raise HBD interest to 20%.
Smart investors who see that the witnesses are using HIVE to secure a $4 million loan at 20% are likely to flee.
BTW, the forum shows a strange aspect of social media. People who like the high interest praise the decision as praising the 20% interest results in upvotes.
People who disagree with the decision leave.
If I am reading the graph; HIVE has lost almost half of its active monthly users since the rise in HBD interest rates.
Things Are Bleak on Hive-Engine
Things are looking bleak on HIVE-Engine. Many of the coins I've invested in appear to have failed.
I bought 50,000 CCC so that I could curate the inktober. The price of CCC has fallen so low that the curation was not worth the effort.
Not surprisingly, CCC coin stopped distributing rewards. The price of the coin has tanked. It is currently trading at $0.0001888 . The CCC richlist shows that several hundred accounts have triggered 100% unstake. So, my guess is that the price of the coin will fall to zero in the upcoming weeks.
It is so sad. The coin was supposed to provide an extra reward to artists. It appears that the artists are now left holding an empty bag.
The Witnesses Could Lower the Interest Rate
The witnesses could improve the long term aspects of HIVE by lowering the interest on HBD.
The high interest failed to bring in new customers and it put a downward pressure on HIVE.
Since the interest rate is set by consensus, the witnesses could gradually lower the rate.
This might help HIVE retain users and might encourage people to join the platform.
We Can Be Thankful
Many investors are foolish. These investors jumped at the high interest rates used to pump up FTX, LUNA, Bernie Madoff and Enron.
Fortunately, investors who have not lost their money on other high interest schemes have learned to flee platforms offering junk bond rates on poorly secured equities.
HIVE was lucky. Most investors saw through the high HBD interest. This limited the amount of damage done by HBD. There is only $4 million invested in HBD savings. It could be worse. Imagine if the equity popular and HIVE loaned out tens of millions in HBD.
HIVE would have seen a much deeper dip if more HBD existed. I am thankful that HBD was not all that popular. It did not attract in new users. It is possible to recognize that the high interest was a mistake and reverse it.
Of course it is unlikely that the witnesses would ever see reason.
My CCC coins followed PAY, BLOG, TIX, BHT, and other coins and is now essentially an empty bag. But I am thankful for my growing collection of empty bags. Although HIVE will end up being a losing proposition for me. I am thankful for the chance to help others pursue their online dreams as I continue to fill empty bags on this platform.
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.
This downward pressure will continue. If the price of HIVE drops into $0.20s we are likely to see the HBD holders convert and dump HIVE.
People who are considering investing in HIVE know that this will happen. The downward pressure is ongoing. Since most HBD will be converted to HIVE at some point, the downward pressure is ongoing.
I have $200 in HBD. I admit, I will panic and dump the coins if the price of HIVE fell to 0.20.
The picture at the top of the page shows a table set out for a Thanksgiving meal. The picture below shows thanksgiving pies.
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