WOW: I'm annoyed; Also Just WOW
Okay so yesterday I was going to talk about how buying HBD was like a super good deal, but liquidity for HBD is so thin that I didn't want any competition. I ended up buying 0 HBD, which was really annoying.
The reason it was such a good deal is that HBD was trading around the 85-90 cent level for a couple hours and we aren't even close to reaching the haircut level. This means anyone who bought HBD at that level (many did because it didn't last) basically got free money.
Haircut
HBD can be traded for $1 worth of Hive at any time. This process takes 3.5 days. After 3.5 days, the network uses the price feed average to determine how much Hive you got for the trade in (destroying HBD).
For Example
Say you burn 100 HBD in a conversion. After 3.5 days, if the price feed average was 20 cents, you'd receive 500 Hive (assuming no haircut).
Haircut
HBD will get haircut lower to $1 if the implied market cap (assuming $1) is more than 10% of Hive. We only have 6.2M HBD in circulation, so Hive market cap will have to dip to $62 before it starts getting haircut at this point. Even after crashing this far (to $161M cap), we still have to crash another factor of 2.6 to reach this level.
In any case, I woke up this morning to HBD trading at $1.70. As I wrote this post it crashed to $1.50 and then now to $1.15. I guess I lost my opportunity to sell what I had.
Because I actually did buy HBD the other day when Hive was trading above 80 cents. I only had like 100 or so coins so now with blog rewards I have 140 HBD. This is the most I've ever had and the first time I've ever purchased it.
However, the reason I'm most annoyed is that I have a powerdown coming tomorrow and I have no idea what I'm gonna do with it... probably power it back up? I really wanted to sell at the 80 cent level... ug... that's what I get for selling all my liquid coins instantly on the first pump... so bad. I can't even seem to take my own advice when it comes to cost averaging. I'd make so much more money trading if I did.
Did you see our other listings?
Oh! I almost forgot. Bittrex gave Hive a USDT listing and a USD listing. We actually have a straight to USD listing... pretty crazy. Funny how they did it totally reactionary in response to Binance giving us the USDT listing. Isn't it funny watching exchanges compete with each other over us? I think it's funny.
Conclusion
As long as Hive is trading higher than Steem the chance to dip further is high. No one knows how many Hive coins Sun and the other Steem supporters have. That's another reason why I'm annoyed... the price of Steem is dipping again and my powerdown is Thursday. Boo! Hold my bags!
Binance also created a panic sell situation by opening trading but not withdrawals and then Sun started dumping at a loss. They did it on purpose to attack us, but once again we see that the listings were probably more valuable than some part-time price-action. HIVE ON!
I have been looking for more information about how to value HBD. I started just converting all of my HBD into liquid hive. Now that I have read this I will be more patient and calculated with my moves. You have taught me yet again!
I'm personally targetting the 17-25 cent level... I think we'll make it back there. 17 cents is right where the haircut starts (the same level that justin sun likes to prop the value of Steem up to.
I don't think we can crash back down to 10 cents again now that everyone knows we can x10 on the drop of a dime.
In fact, if we look at the internal market... Hive is already trading at the 0.25 level on the low side. I'm going to try and see my HBD right now for that 4:1 ratio. That's a good deal.
Where do you go to look at the internal market? Are you speaking of the steem/hive engine?
https://wallet.hive.blog/market
I've found trading to be too much of a headache. And the chances of a tragic mistake are high.
I've reached the same conclusion, but I'm not going to give up.
I think I can come up with a system that vastly hedges against volatility.
The best way to play this market is to play it safe while everyone else gambles their ass off.
That's definitely true. I've learned it the hard way. Back when I was trading, crypto-crypto trades used to be tax free where I live. In July 2018 they changed it. After that trading was a doubly shitty proposition. Some relief was brought in September 2019 when they allowed for losses to be deducted from wins.
Yeah, not allowing deductions in some areas was such an insult.
How are you going to tax money that doesn't exist?
That's the government for you.
The idea is that for each trade you should calculate a percentage of the profits when a taxable trade is executed, cash that out and prepare to pay it to the government come tax season. I think taxing crypto-crypto trades is unnecessary. It just complicates matters too much because of the insane volatility of cryptocurrencies. That leads to non-compliance and lost tax revenue.
It went up to $2.86
That's insane, 1.70! I just got rid of my HBD yesterday, I should've kept it lol. I sold my liquid coins at the high so I can buy back at the low. Not sure when that low will happen but one can try, at least with posts, I'm getting rewards coming in. I unfortunately don't even check many prices any more as part of my routine. I should but I did it for so long it got tedious, not being able to use some of these other exchanges since I don't use a VPN.
Crazy times. They should ditch HBD its a broken one way peg and the pumps create a large inflation hangover.
I saw it when it was around $0.78, put in 'the next' buy order but missed it!
Should have just bought at the available price.
They'll be other opportunities.
It can still really be possible that the hbd might still hit $2.5 before this week end as nothing is impossible when it comes to price attainment
well what HBD at $2.88 that's awesome but it would have been more cool if it got more listing just like hive