The uniqueness of the Hive community from a trading perspective

On most cryptocurrencies, market makers can easily shake out unnecessary participants from the market, defuse the rocket while it’s still fueling, so it can fly to the moon, Mars, etc., without excess baggage. This is usually done through sharp price movements, news, or the influence of opinion leaders. Speculators tend to act similarly and respond in predictable ways to various market conditions. This is particularly evident in large crypto chats with trading signals and a swarm of small traders.

With Hive, however, things are a bit different. Let’s try to figure out why.

I don’t want you to perceive the information here as a compliment or, conversely, as a claim of superiority over others—that’s not the goal. And it’s hard for me to be fully objective, but I’ll try. The goal was different—specifically, to compare the average user here on Hive with those outside of it.

It’s clear that the initial driving force for everyone in crypto projects is the pursuit of easy profits. But is there a phenomenon where Hive shifts the user’s focus over time? If so, that’s a precedent and something worthy of attention.

Everything described below is the author’s subjective opinion (or if you prefer, fantasies). All events are fictional, and any resemblance to real situations or individuals is purely coincidental—probably, but not guaranteed. 😉

Let me clarify upfront that below we’ll be examining the typical behavior of the so-called "crowd"—how an average user behaves, lacking skills, experience, and an understanding of basic market principles. Specifically, in the market phase characterized by participation and asset distribution (see Dow Theory), these participants make up the largest percentage. They are the majority, typically with small deposits (ranging from a few dollars to several tens of thousands). This group is often referred to as the market’s "fresh blood."

And it’s precisely thanks to this numerous group of participants with small deposits that the entire "banquet" takes place.

The user community

I have some experience working with information related to cryptocurrency projects. From what I’ve seen, most users across different crypto projects are speculators of varying levels. Traders are encountered less frequently, and actual investors even more rarely. The majority are speculators—or at least they think they are.

Let’s sketch a portrait of the classic speculator and compare it with a participant in the Hive community.

Most speculators imagine the process like this: buy cheap in the morning, sell high in the evening, repeat this for a few days, and then buy a Lamborghini, a big house with a pool, a private island, and so on. In practice, of course, things look quite different.

A Hive community participant, on the other hand, often begins to set long-term goals and gradually achieves them after adapting to and familiarizing themselves with the ecosystem. I’ve often come across accounts with significant HP holdings. These users frequently share their progress and define clear, long-term objectives. Over time, the influence of such participants in the chain grows significantly.

Of course, there are participants who consistently sell their rewards, which is entirely their choice. However, their influence within the network is minimal, as are the rewards they receive.

How does a speculator interact with a crypto project? - Subscriptions to social media to track the project’s news in hopes of catching a pump and avoiding a price dump, participation in airdrops, debates in chats, and speculating on where the asset will go, with others like them. Less often, speculators delve into the project, and if it’s a PoS project, they might stake their assets. There is a very strong dependence on price behavior: if the price rises, typically more participants join the project (the project is good); if the price drops sharply (the project is bad), many lock in their losses, and the cycle repeats with a different project. Developers usually speak on behalf of the project, and all other participants just listen.

How does the Hive community interact with the project? - Well, this community lives within Hive, there is a full-fledged ecosystem with an internal exchange, social networks for every taste, and the community directly participates in shaping Hive. Ideas are discussed, and even if your voting power is low, you still have the opportunity to voice your opinion, and you will be heard. It’s something like its own autonomy. Some projects are realized, some are not, but there is a process involving many people, and anyone can participate in discussions in one way or another. Essentially, the community here is Hive, and Hive is the community. And this is the fundamental difference in the interaction.

How do participants in the Hive community react to price behavior? — This deserves a separate topic, but it seemed unusual to me🤣, as for a crypto project. The price goes up — okay, the price goes down — also okay. It feels like the price of HIVE hardly concerns anyone. Sure, everyone wants the price to go up, but no one is pulling their hair out if the price drops by, say, 20-30% in one evening, which can’t be said about speculators in crypto chats, where emotions run high and the rhetoric changes dramatically, from "to the moon" to "all is lost". Here, futures trading plays a big role, which became especially popular since 2021. When people with no understanding of how things work start trading futures and take leverage of 10x or more (and some exchanges offer 200x leverage 🤑☠️), it always leads to the same result — a complete wipeout of the trading account, with no exceptions.

A speculator is not particularly concerned with the project's fate, the technology, how the project works, or who manages it — no one cares about any of that. The main thing is to sell a useless shitcoin to another fool for a bit more and make money. And the scheme works as long as there are fools to buy in. Once the fools run out — the market enters a new phase, and everything starts over. By the way, such projects (shitcoins) often get wiped out when the developers decide they've made enough money and the influx of fools slows down. After that, the shitcoin is just dumped on the market at any price, and the price drops to zero.

In Hive, the situation is different. I came across an interesting article (highly recommended), with some very interesting comments beneath it, providing a snapshot of the community's thoughts. The essence is that most users who commented, even with the understanding that the coin they hold might increase by 3000%, do not plan to sell everything. And it's not because they are waiting for the moon to happen. Opinions vary regarding the percentage; some plan to sell 20%, others 50%, and some want to keep a larger portion for influence, etc. But no one mentioned they are ready to sell everything and start over.

Of course, there is the example of the XRP army, who haven't sold for years while waiting for a price of $500 or so (crazy, to say the least). But all their interaction with the project ends at reading news and holding the coin in their wallets. Or perhaps on the current market, they've already sold what they held at a loss for several years? 😁

If I only had an understanding of the community from this article and the comments beneath it, I wouldn’t rely solely on that. But similar thoughts are quite common on the platform, and they come from various authors who are not connected to each other. If you want, it’s like a local mentality, if that’s a fair way to describe it. Of course, there are people who sell all their rewards, leaving just a minimal amount of HP to write posts, but that’s their choice, and we are talking about the community as a whole.

Of course, people may say one thing (they even believe it), but when it comes time for action, things often turn out differently. And that’s normal. It depends on many factors—discipline, intellect, greed, fear—but emotions, which distinguish us from robots, play the leading role. By the way, it’s a big mistake to make decisions based solely on emotions. I wish you to have a plan for any scenario.

The technical part and the nuance of 13 weeks

Thanks to the technical barrier of a 13-week withdrawal period for coins from staking, the risk of panic selling driven by emotions is reduced. It also decreases the potential sharp selling pressure on the asset's price and helps maintain the price in the short term. But this also has another side...

While on other cryptocurrencies, sharp price spikes can shake out speculators from the market (both during price increases and drops), HIVE is more inert, and such shaking out is impossible here. This means that the selling pressure will not be as sharp in the moment, but it will be stretched out over time, making it long-term. This makes prolonged price manipulation almost impossible, but it is possible if there is a significant growth in the user base, that is, organically.

I once came across a short message from a user who wrote that some people were complaining that they didn't manage to sell at high prices during the last bull market because of the 13-week staking withdrawal period. But whose fault is that? — Only their greed. These people wanted to earn simultaneously from staking, curation, and speculation, but it doesn't work that way. Rationally, in this case, one should have a pre-prepared action plan — to decide in advance what portion of HIVE will be kept as HP for staking and curation, and what portion will be sold and at which price ranges. What you plan to sell should either be set aside or withdrawn from staking in advance. One needs to resolve the dilemma with their greed and keep it under control.

If you follow your greed, it will likely be your downfall. For example, let's imagine the asset reached a peak value, say 100 USD per coin, which made you decide to lock in profits. The user started withdrawing coins from staking to sell at these peak prices, but after the first week, the price will naturally be different, perhaps 80 USD. Will the user lock in profits at this point, or will they wait for the price to return to 100 USD? Now imagine that half of the coins come out of staking when the price is no longer 80 USD, but let's say 20 USD. In this case, the sunk cost fallacy will force them to make even more mistakes. What caused this? — A lack of a trading plan and emotions.

The presence or absence of a trading plan plays a decisive role. If there is no plan and decisions are made based on emotions, it usually leads to a series of mistakes.

Conclusion

At the beginning of this article, I touched upon the idea that Hive, as a project, influences how new users perceive themselves. This is, in a sense, a precedent. It's likely that this situation arose due to the traditions of this community, as well as the fact that, during the adaptation process, a new user gradually changes their attitude toward the project. Initially, it may have been about earning quick easy money, but over time, as the participant integrates into the community (assuming they have the desire to do so), they undergo a reevaluation of values in a sense. As a result, the paradigm shifts from "personal profit only" to "personal profit with consideration of the community's interests" as a whole. In a way, this is a shift in mindset from "take only" to "give and take." Personally, I find the second model to be more harmonious, in terms of how the laws of the universe work.

PS... I don't know why, but while writing this particular text, my thoughts kept drifting in one direction and then another. The text was edited several times before publishing, perhaps due to the sheer amount of information I’ve read about the project in such a short time, and I need time to process it all. I’m still actively trying to understand how everything works here, and constantly making new discoveries for myself. It’s an interesting experience. I invite you to join the discussion in the comments, as I’m curious to hear your opinion.