A week ago I performed my first real "successful" HBD to Hive conversion.
Of course I've done this many times before in the past, but I was never actually sure if it was smarter to do the conversion or just trade on the internal market. This time I mathematically ensured it was the best move.
I was able to sell the mini pump very near the top. Something like 8.7 cents. But when the price stabilized around 6.6 I was not able to buy back in because the HBD price was 6.9. I found that annoying but realized it might be the perfect time to convert it at the lower price. This worked out surprisingly well and I was able to buy Hive over the 3.5 day average right around that 6.6 level, which was around a 5% discount from the internal market.
Honestly these conversions are tricky and best left to professional market makers most of the time, but once and a while you get an opportunity if you know what you're doing. To be fair I only made like 1400 Hive from the trade in total, and the conversion was only 5% of the profit, so it really didn't make too much of a difference. More like a science experiment than anything else.
The 3.5 day average makes you feel dumb.
If the price of Hive goes up, you get a worse deal and you'll feel like you should have just used the internal market at the worse price premium. That's the normal part. However, if the price ends up going down and you get a discount you still feel dumb because the average never goes lower than the current price. It feels as though you should have just waited and once again used the internal market to trade in both situations.
Certainly the best thing that can happen is that the market crabs during the 3.5 day average. Coincidentally this rarely ever happens because the peg only breaks during times of volatility, so what are the odds that the volatility ends right when you make the conversion? In this particular case it did crab which I thought it would because of the pump/dump nature of these specific moves.
Is the price of Hive stable here?
I'd like to think so but also I can't really imagine Hive staying flat if Bitcoin starts crashing, which I think has a decent chance of happening very soon. The nice thing about Hive pumps and dumps like the one we just saw is even though they return to the lower value they tend to solidify the bottom and make the support at this low level a lot stronger. One can hope. Either way I think September is going to be a killer month buy buy the bottom on most of these assets.
The Bitcoin chart itself is trolling hard.
Price is firmly stuck between the MA(25) and the MA(200). Four year cycle theory dictates we are going to crash once more before completely bottoming, but it's completely unclear how high this summer rally can go. My guess is that a breakdown is imminent and can happen at any time, even though I was hoping for a peak in June or July it just doesn't seem as likely anymore.
Conclusion
Bitcoin and Hive price action have been pretty boring lately but big moves are coming very soon. Annoyingly number will likely go down unless we really do get one of those magical summer rallies (inside of a bear market year no less). Maybe if we pray to the crypto gods hard enough we'll be blessed with more pamps.
There's nothing wrong with being up 1400 Hive. Congratulations on your successful trade.
Thanks!
I've heard the real draw for conversion is the fact that the HBD gets burned or something like that. I can't say how true that may or may not be.
The HBD conversion play is one of those mechanics that looks simple on paper but gets subtle in execution. I've been watching the print rate vs. HBD supply ratio — at sub-10% print rate, does conversion actually stabilize the peg, or is it mostly arbitrage opportunity right now? Also curious: you mentioned selling at 8.7 cents peak and not catching the 6.6 re-entry. Would holding HBD through that gap and converting when HIVE weakens again be a viable middle path, or do you think the opportunity cost of holding HBD vs. HIVE staking rewards changes the math?