Sometimes it just sends the HBDs straight back to @hive.fund, but recently it's been buying up thousands of Hive every day and sending those back to the hive.fund, essentially locking that Hive up until those with the Power decide to release it somehow (through voting for new proposals/ Hard Forks changing the rules of how the @hive.fund is managed, for example.
If I remember correctly HIVE sent to @hive.fund gets converted to HBD.
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I'm not sure it does - I trawled their wallet and couldn't see any history of conversions, unless they do so less regularly than once per day which may well be the case?
It has a special operation for it, that is why it doesn't show up in wallets and explorers. In the next HF, a virtual operation will be added so they show up.
Ah I see, so maybe it's something else pushing the Hive price up then?
Surely not actual demand?!?