Hive dollar costing 1 dollar?! Now that is a rare sight!
Funny enough, it is rare to see HBD worth $1. This token was supposed to be pegged 1:1 to the USD, but it rarely is! There are mechanisms to control supply and demand and try to peg it to $1, but I think because of the liquidity and volumes of Hive as a whole blockchain, it does not manage to stay there quite often.
I am certain that the HIVE price increase has something to do with it! I did notice that when we were a smaller ecosystem, worth 100 or 200 million USD, we could fluctuate as much as 100% away from the dollar peg! As the Hive ecosystem grew I also noticed that it is now closer and closer to the USD, it was 10% off... 5% off... And now it is pegged 1:1 to the dollar!
Not sure if it is going to last, but it is a cool and rare sight to see!
The difficulty that HIVE has in holding its peg is puzzling. HBD is one of the few truly predictable investments in the crypto world. When it is well above $1.00, the system creates incentives to bring the price down. When it is well below the peg, the algorithm turns on incentives to raise the price. The algorithmic incentives and disincentives will prevail over market trends.
The HBD price does an interesting job reflecting the flow of HIVE in and out of the ecosystem. These fluctuations are temporary.
Most people on HIVE understand the HBD peg and invest and divest the coin accordingly. Personally, when the price rises about $1.05, I divest and convert my HBD because i have faith in the peg. I know that I will get more by selling HBD above the peg than I will get from the interest rate.
The wild fluctuations must be created by contrarians.
BTW, the wild fluctuations in SBD are much more interesting as SteemIt has completely lost control of its peg.
HBD above $1 kinda makes sense, because even if bought at a “loss” the 10% yearly yield makes up for that
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