Hi fellow Hiveians,
As the title of the post says, I'm curious for some information on what the best conversion time is for HBD to liquid Hive.
Timing is Everything
One of the things we all know nowadays is that you have to properly time something in order to achieve optimal results. I'm curious as to what folks think about the timing of their conversion of their HBD into liquid Hive.
I tried doing a bunch of searching last night to see if I could find old posts from Steem on when people convert to hive. The results weren’t really good because people were focusing on when the price of HBD (formerly SBD) was over 1$ which I get. What about it being under 1$?
Those of us that use and love the PeakD desktop website wallet page are very familiar with that screen on the right side! I am often checking the price out of curiosity to see if things have moved. When there are big movements in the prices I go and look to see if other crypto's are moving similarly or if we have some whales buying up a bunch of Hive to get in on the FOMO!
One of the things that I haven't been able to get a clear answer on and I'm hoping the smarter people than I in the LEO Finance group might be able to shed some light on it.
Optimal Exchange
What is the optimal exchange price for HBD to Hive? I've heard that getting to as close to the 1$ peg is the best thing to strive for. I've recently heard others saying exchange your HBD for liquid hive while the price is down.
What price point do you exchange HBD for hive at?
Is there a basic explanation of the math? I’m thinking that 1.0 / .22 x .92 or whatever the current price of HBD is may not be right but I’m not sure.
What's the best bet?
What's the math behind that?
I've tried doing some math on the internal market but haven't really been able to figure out a good way to depict the information.
I would like to understand it that way I can help explain to some of the newer people I’ve been interacting with a lot!
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Conversion from HBD to Hive can happen anytime with the same result. If the price of Hive is $0.25, you will get 4 Hive whether HBD is $0.90 or $1.10. For the sake of conversion, HBD is always $1.
However, if you can buy 1 HBD for $0.90, that means you are practically buying $1 at a 10% discount. You would still be able to convert 1 HBD to 4 Hive at $0.25, except you paid less for the HBD.
You profit more when you sell HBD at a higher price than $1. You “lose” when you sell HBD under $1
If, on the other hand, you hang on to HBD, and the price of Hive suddenly drops, you can convert or trade HBD at the lower price of Hive, yielding more Hive. In this regard, it’s cash in the bank.
From end to end, if Hive price dumps, and HBD is under $1, you can buy HBD to take advantage of the discount, then convert HBD to Hive to take advantage of the lower price of Hive. If you buy Hive directly, you miss out on the HBD discount.
If HBD is higher than $1, it’s not worth buying HBD. It’s like buying $1 for $1.10. Why pay a premium when you already have $1?
However, if you sell your HBD above $1, you’ll get a higher return. You can turn around and buy Hive with the proceeds. You’ll get more Hive buying it with HBD sale proceeds than by direct conversion from HBD. You’d sell $1 for $1.10 and then use the $1.10 to buy Hive.
This is my best understanding of HBD.
What I don’t know is what advantage depositing HBD into Savings has. Does it earn interest?
That would be fascinating.
My understanding is that HBD represents locked up Hive that is used as collateral to peg the HBD to $1. The system does all kinds of gymnastics in the background to make that happen. The maths of that are more than I care to know.
Thanks for the detail here man! It’s great and really explains the challenges I’ve had with understanding how HBD and conversion work. Looks like I’ll always be converting until we start to earn liquid hive for posts again. Then I’ll be buying HBD for discounted prices when I can.
Appreciate the great comment and stopping by my post!
Edicted made a post on here about how savings is great but it’s not working. It’s an excellent additional feature but no ones using it. I think he said there’s a bug in it they haven’t or don’t fix.
!ENGAGE 50
ENGAGEtokens.I did a lot of research on this about 12 months ago and found a few hidden articles about it.
Basically, I've learned that if the price of HBD is below $1 then it's best to convert because you will get $1 worth of HIVE based on the average price of HIVE over 3.5 days. But I go to convert when it's $0.95 or $0.90 or less!
If HBD is above $1 then you definitely don't want to convert as you will lose value due to the conversion averaging to $1. So in this scenario, it's best to use the internal market if you want to exchange HBD for HIVE.
Rule of thumb for optimal results?
Convert at less than $0.90
Market at greater than $1.10
Not financial advice etc.🙂
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Hi, nice research.. One question.. How do we know this 3.5 days "convert" price?
It's an average of the price of Hive over 3.5 says but if you use PeakD to do it then it will tell you how it calculates it.
Say the average price of Hive over 3.5 days was $0.20, you'd get 5 HIVE if you converted 1 HBD.
I got it, so we check the price of HIVE at that time.. Thanks..
Yeah that's it! Happy to have helped 😃
I have read something like this before! Thats what I have been doing
Yeah tricks of the trade mate haha
Posted using Dapplr
Awesome thanks man! So you use the convert request to do it, instead of doing it on the internal market? I don’t like the 3.5 days wait time lol but will do what I need to do in order to maximize my liquid hive.
Yeah you do the convert request on your wallet in peakd, it does tell you how it works there too which is cool. Yeah 3.5 days feels like 3.5 months at times haha!
the internal market is good if HBD is high or if you want it instantly but you may lose a few Hive in the process, depends on how much you want to get I guess but sounds like you want to maximise everything so need a bit of patience sometimes 😀
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Wow .. Nice Work, Buddy 🥂🎂💝
Best wishes from Berlin
Olllieeee
Mate, I've been here nearly 3 years and I wouldn't have a clue. I suppose I would if I knuckled down and thought it out - I'm not stupid - but I kinda put my energy into other things, as you know. I probably bleed crypto doing it my way lol
Hahah yeah same here. I don’t know what I’m doing with some of these technical things but I’m learning slowly! I’m mainly interested in figuring out if holding my HBD until the price gets close to 1$ is not a good idea or if it’s the best idea. With having Hive power goals, I want to attain those but understand a decent way to get there.
Thanks for stopping by as always!
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Great topic man! I use the internal market when the HBD value is high to convert my HBD to Hive 'cause you are trading this exact moment and you are not waiting 3.5 days as @nickyhavey suggested. I didn't know about the rate conversion when you are using 3rd party services like Hive! Damn I should have traded my Hbd for Hive when Hbd was at 0.89 today 'cause I got a ton of them lol!
Valuable info man, reblogged!
Yeah waiting the 3.5 days is tough for me to do lol I want to sell my HBD now! I definitely learned with this post so I’m hoping more people did as well!
I’ve been exchanging my HBD when the price is close to 1$ but it doesn’t get there too often so i was waiting a lot lol
Yeah, I wanna sell some too but I am waiting for the right chance! I sold some a month or so ago at 1.30$ if I remember correct and I've been stacking since then! I was just lucky to be online during the pump lol!