The price illusion
There is a big discussion around the present Hive price. With the decline of the last weeks, people are asking themselves whether hive is in danger. I've been in Crypto for 10 years now and still it seems that the price of a token is the most important aspect of it for most users. The price however is pretty relatif. Let me explain why:
The price stands mainly for the demand of a token
Instead of taking the example Hive, I will take BTC to illustrate my reasoning because with BTC the supply is better known. For Hive it might look slightly different but the principle is the same for all crypto at a different level.
What was the difference between 1 BTC in 2014 when it was 250$ and now when it is around 65'000 $? Has the value of one BTC changed? It seems so but back in 2014, I would have had 1 out of 21mio BTC and today this ratio is exactly the same. The proportion of the overall supply didn't change but what changed is the value expressed in USD.
So let's see what changed since 2014. People didn't really know about BTC back then and very few people owned some. Today, almost everybody knows about BTC and a big percentage of the population owns at least a part of a BTC. The price is exactly the illustration of the change in demand for BTC. That's the law of offer and demand. If for a similar offer the demand increases, then the price will increase as well. Since the demand for BTC increased very much, the price made a big jump. The fact that the minted supply for BTC is growing slower over time, simply increased this phenomenon.
Lower prices means lower demand
So when we have Hive prices dropping, this can only mean that the demand for the token is decreasing. There can be many reasons for that but Hive also has a slowing mint rate over time even if it is not deflationary like BTC. If we look at Hive 5 years back and hive now, I would say the basics haven't changed much. There were some improvements made to the chain but overall a lot of dapps have disappeared in the meantime. I would say we are about at the same point that we were 5 years ago in terms of technology.
Facing the issues
I would say that over the 5 past years Hive had some issues and one of them is that most OG's of the chain kind of lost their fire. The people who were very active back then and created apps mostly are not that active anymore. A lot of projects lost their momentum and many things don't work that well anymore. I would say that Hive needs fresh blood, fresh ideas, fresh dapps.
Lower prices can be a chance for Hive
Lower Hive prices are not necessarily bad for the chain. This means that new users can get Hive Power at a cheaper rate. This means that dynamique accounts can grow faster than the ones that are not active. It could bring this fresh blood, these fresh ideas that are needed. Because in the end with this blockchain it's the stake holders that define how the chain evolves. It's the people with a lot of stake that define how the reward pool is distributed, who define which proposals are funded and which witnesses are voted for. I hope that with lower Hive prices, we will assist to such a change that would be beneficial in the long run for hive. I think for all these reasons, it's a great time to grow our hive power.
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Thanks a lot for the curation!
For sure this low price is an opportunity for me, to buy a hive and power up, I believe that in this low price I will get at least 350+ HP for my profile
I always see such price drops as opportunities to grow my stake on my road to become a whale ;-)
I'm thinking the same thing! At the moment I've already taken advantage and got exactly 338.205 HP more for myself, but it doesn't stop here, as long as it stays low like this, I want to try to acquire more!
💓
Are you also going to @hivefest? =)
I have some plans but it's not 100% sure yet.
Interesting reflection! I saw that it all started when btc miners decided to sell part of their stake hehe! Alt coins followed the trend! It is a great opportunity for sure to get a bigger stake of the coins that you hold but at least with me the risk and fear are still knocking in brain backdoor hhehw
I have a strategy to always buy a little bit and buy more when prices are down. Like that I get an average entry point that retraces the market prices.
This is so true, the price drop could actually be an opportunity for growth in Hive. New users getting in at a lower price might actually bring in fresh ideas and energy, which Hive really needs right now. I'm kind of a new user and I came in when Hive was around 31 cents however I understand crypto markets so I'm not worried at all but rather working harder on Hive
I saw Hive at 0.12$ and at 3.00$. So I'm not panicking ;-)
Oh wow it can go so High as 3 dollar 😳😳😳 this is great potential
Is the drop in value an invitation to buy, in your opinion?
I say this because I am removing my HBD from savings with the aim of acquiring Hive on the market. My experiment will be to evaluate whether I made a good move. I will compare it with the passive growth of 20% APR of HBD in one year.
In other words, I have one year to make more than 20% profit with my small resource.
I wouldn't say it's an invitation. I simply believe that it's a good moment to publish posts and maybe increase the stake. It's easier to grow the stake when prices are down.
I wouldn't want to give financial advice but I'm not sure how long it will be possible to keep the 20% APR for HBD. The closer we get to the haircut level, the faster the rate will have to be lowered. So it's possible that we won't get any return on HBD one day. On Hive the APR should be around 10% with organic growth and curation rewards.
Tbh, I attribute the drop in the price of HIVE to the decline of Splinterlands too. Like it or not, SPL accounts for the majority of activity here. I guess what this means is that the future of HIVE will depends on what kind of winning applications set up shop over here.
I think that it at least contributed a lot to the price decline. I'm probably not the only one who decided to take this moment to sell my cards and most other probably sold their hive. I powered up everything on an alt account so far.
The smart ones should either buy more Hive or at least stack up some Hive
That’s because there is no need to panic. The price will surely pump again
It's always good to do the opposite of what the majority does. Buy when everybody sells, sell when everybody buys...
Totally agree that Hive needs new ideas and new players. And no doubt these prices are an opportunity for those who want to grow their stake, maybe that will make true decentralization not such a distant idea.
I think that true decentralisation will only be possible if the stake is distributed on as many shoulders as possible.
💯
We spend too much time investigating and researching why the price drop happened, and many times, because of that, we miss other opportunities... Like doing a work instead of freaking out! :)
Freaking out often is kind of conterproductive lol. It's normal to worry but we shouldn't forget that the price is just one parameter of a token and not 100% of it.
Totally agree, many people seem too fixated on the price, which doesn't reflect the fundamentals sometimes. It's similar to investing, where most people like to chase the hype only when price is high.
!LUV
Markets and prices are often the result of psychological effects that are difficult to explain rationally. It's ok to look at the prices but we shouldn't let us get into the panic mode when things are red :-)
I think hive is alive and well, but I do agree that a lot of people have left. Onboarding/retention requires a lot of things to do and I do agree that dead projects are a problem. I have seen quite a few die because the people who were in charge just went inactive.
Unfortunately, we haven't really discovered the concept of decentralised work organisation. Most Hive projects are one man shows and when the guy gets tired, the project dies. We need to come up with new ways of organisation for a new economical reality.
The price been fixed lower can make it to actually be affected though
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