How Powering Up HIVE For PUD Every Month Earns a 36% ROI

in LeoFinance6 months ago

Powering Up HIVE For PUD Every Month for the Past Year Would've Earned You This ROI.png

I've been running a few different historical data sets lately for Bitcoin and Ethereum. I thought it would be interesting to also throw Hive into that mix, but then I remembered that HIVE Power Up Day (a.k.a. PUD or HPUD) is tomorrow.

Instead of just throwing up the raw numbers for buying HIVE at $10 a day like the BTC and ETH research I did, let's take a look at what a HIVE PUD participant would've earned if they powered up $10 worth of HIVE on the first of every month for the past 12 months:

Note that I used STEEM price data for months prior to April of 2020 (since the first month of PUD for Hive after the fork was on the 1st of April). Because of the clean fork from STEEM and 1-1 airdrop of stake, buying "20" STEEM on the 1st of January still would have yielded the same amount of HIVE post-fork.

Looking at the data, a $10 per month strategy of buying HIVE would have gotten you a total of 725.62 HIVE in exchange for your $120 total spent for an average of 1 HIVE per $0.165 USD.

The current price of HIVE is about $0.225 USD, which means you would be able to sell that 725.62 HIVE that you bought for about $163.27 USD for an ROI (return on investment) of 36.06% (which is also an annualized return of the same number, since this study only goes back 1 year).

Is HIVE A Worthwhile Buy?

It depends on your perspective of HIVE. When you break the data down by the monthly buy of $10 for the Power Up Day's, then you would have made a nice return over the past year.

When you look at the data for daily purchases (as I did for BTC and ETH), then the numbers tell a different story. The STEEM price (since the majority of the data going back 2 years is based on STEEM buys rather than HIVE buys) gradually declined with time.

Many of us speculate that the STEEM price declined steadily over time because Steemit, Inc. was "programmatically selling" STEEM each month to fund their bloated and inefficient enterprise.

Regardless of why STEEM declined over time, it did. When you analyze the price data, it proved to be an unworthy investment as a daily dollar-cost average candidate. While BTC and ETH steadily rose in value over time, STEEM did the opposite. Wild spikes up in price and a steady decline.

On Hive, it does seem like things are different. In price, yes (seeing as how we consistently are valued higher than STEEM) - but also in terms of other factors like no Steemit, Inc. stake to see programmatically sold each month with an open development fund to replace it. More lively projects and communities... more community ownership, better social presence etc.

There's a lot going for Hive that wasn't going for Steem.

Hive-Based Income

With that said, remember what I mentioned about perspective?

The perspective you have when it comes to investing in HIVE matters greatly. If you're the kind of person who's regularly investing in HIVE using a DCA strategy like the $10 a day or even $10 per PUD, you can be extremely successful when you couple that buying with curation, delegation leasing, project building, etc.

You see, Hive is not like other investments nor is it like other blockchains. I view buying HIVE as similar to funding a business prospect. When you add capital into your business, you expect to use that capital to build something that generates more capital or something that generates some sort of other form of value for the business at large.

On Hive, you can buy HIVE, power it up and generate a return on capital from the investment. You can also build a community or curate content or delegate to projects. There are dozens of use cases to choose from, but I believe that HIVE gives a level of control back to the investor.. and that's what we all love in crypto.. right? Control.

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I don't include author rewards in my Hive ROI. Curation, inflation and selling hive-engine tokens is fine because the effort required is minimal and it's required to get a return. However, there is just too much unique time input required with posting it's more like business income than investment income.

I agree, it's more valuable to view Hive-related activities as a business than as an investment. You decide how much you want to invest in your business (account) in terms of time and capital and from there, you work to generate a positive cash flow.

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Thanks @khaleelkazi for this insight! It has purely answered my question in your previous post.

Glad to hear it @robmojo! I am working through some other models for investing in crypto with these types of DCA strategies ;)

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If the price gradually decreases, for example, STEEM back then, even adding return from curation or projects might find it hard to get a positive ROI. It would be great if the price goes up. From a business point of view, it makes more sense.

Thank you @khaleelkazi for sharing this.

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It would definitely be positive for the price to go up. Even if the HIVE price remained flat, you'd be able to generate a comparable return to something like BTC or ETH.

On Steem, one thing to consider is the Steemit, INC. dumping every month to cover their expenses. I wonder if Hive will have a more consistent and sustainable price over the long-term with no Steemit, Inc. out there selling stake.

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If you really want to get the best out of HIVE DCA I'd say load up on HBD and then set buy orders on the internal market to pick up at $10 sizes all the cheap HIVE you can get or on exchanges with USDT pairings.

I think buying HIVE is buying chain resources not buying a token as alts are just speculation, this token actually has loads of utility from tapping into the reward pool in various ways to allowing you to transact on chain.

If only we had things like SwanBTC and these debit order apps you could set up to stack HIVE that could be a cool option

That's interesting, I may use some HBD and try that out. I often set low bids on HIVE with BTC and wait for them to get filled when a whale dumps and the price flash crashes for a minute (it happens more often than people realize).

I'll try this out with USDT and with HBD and see if I can get some cheap HIVE. I agree with you - it's about chain resources and influence over profit. If you're looking at Hive from a profit-only perspective, there are better investments out there.

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Excellent perspective in this post @khaleelkazi! This is ...

"You see, Hive is not like other investments nor is it like other blockchains. I view buying HIVE as similar to funding a business prospect."

... a particularly important one for us all to keep in our minds.

"When you add capital into your business, you expect to use that capital to build something that generates more capital or something that generates some sort of other form of value for the business at large."

Now ... Is this happening? We will all have our particular perspectives on the answer.

Thanks for writing this and putting the effort into the historic perspective of what even a monthly PUD means, from the all-important basis of evaluating the ROI .


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