How I Made a 23% Profit From the Monthly HIVE Price Spike
For those of you that keep an eye on HIVE prices throughout the month, you may notice that near the beginning of many months, there is a noticeable spike in the price of HIVE to over $1 USD. I wrote about the last spike here.
As you can see in the price chart above, there were distinct spikes in the first week of September, October, and November. Each of these price spikes were more than 25% and pushed HIVE above $1 each time. I have not had the liquid HIVE to take advantage of these spikes until the most recent one in November.
When I saw the price begin to spike, I immediately took action to move my liquid HIVE into HBD. Now, for starters I will say this is not the ideal way to trade this spike, but I do not have access to Binance and wanted to profit from within my HIVE account. Hive Based Dollars (HBD) is a much more stable token meant to be closely pegged to the USD. My goal was to move my HIVE to HBD when the price of HIVE spiked, but the price of HBD was still right around $1. This would essentially "lock in" my HIVE gains and allow me to convert back to HIVE when the price of it falls back down below $1.
In order to trade your HIVE for HBD, you can use the Hive Wallet marketplace: https://wallet.hive.blog/market
While I didn't catch the top of the price spike, I was able to sell my HIVE for HBD at around the price of $1 for HIVE. The price spiked to about $1.10 that day though. Here's a sample of some of the transactions in my wallet:
Each of these are showing what I sold in HIVE and what I received in HBD. At the end of the spike, I'd sold 3,000 HIVE and turned it into HBD.
Converting HBD to HIVE and Realizing Profit
Now that I've moved that HIVE into HBD and locked in those gains, I need to convert the HBD back to HIVE once the price of HIVE falls after the spike in order to truly realize my profit.
There are two ways to do this. The first is to use the Hive Wallet marketplace again and this time enter orders to buy HIVE. In this case, as long as I am buying HIVE for less than 1 HBD each, then I am making a profit. The second is to use the Convert HBD to HIVE feature.
I waited a few days after the spike for HIVE to settle back down to around $0.80. But I chose to use the Convert HBD to HIVE feature found within the PeakD wallet to realize my profits. This procedure takes about 3 days and gives me HIVE based on the value of my HBD being $1 each. The average 3.5-day price of HIVE is used to determine how much HIVE I receive in exchange for my HBD.
As I noted before, I sold about 3000 HIVE for HBD during the spike so the above transactions show my conversion of those 3000 HBD back to HIVE. Since I traded my HIVE to HBD at about a 1:1 ratio during the spike, any amount of HIVE that I receive in excess of 3000 will be my profit.
As you can see, the total HIVE received from the conversions was 3,690, which is a profit of 690 HIVE or 23%! At a stable price of $0.80 per HIVE, that's about $550 USD just for taking advantage of this monthly spike in HIVE price.
What to Do with my Profits?
My original plan was to parlay this trade each month and continue increasing the amount of HIVE in my account by taking advantage of this HIVE to HBD trade the first week of every month. However, with the @Splinterlands Chaos Legion Pre-Sale event coming to an end this month, I decided to use my profit to purchase VOUCHERs on the market to be able to guarantee myself a Doctor Blight promo card in the pre-sale airdrop. The guaranteed promo drop requires the purchase of at least 50 pre-sale Chaos Legion packs and the required VOUCHER tokens are going for about $20 on Hive-Engine.
I recently wrote about how it costs over $90,000 to get to the Top 6 rank in the Chaos Legion pre-sale leaderboard. That $90,000 is already history and it appears the minimum is now up to $104,000 and climbing. The top 6 finishers each get to design their own Legendary Summoner card in the Chaos Legion set. I won't even come close to making the leaderboard, but after watching things unfold during the pre-sale, I want to try to take advantage of the situation since it will not happen again. Whether I make a profit on it remains to be seen.
How Could You Profit?
Simply make sure you have some liquid HIVE available at the beginning of the month. These spikes seem to occur in the first week of the month and begin around 12-2am UTC. If you follow the same trading procedures I did, you may make a profit if HIVE falls back down below the spike price as it has in the past.
Remember, past performance is no guarantee of future results and I am not providing investment advice here, just showing a pattern of price activity for educational purposes.
last time I sold 3000 HIVE at 1750 Satoshi, and bought them back at 1250 :)
and made about 1000 USD from it
Awesome! What platform are you using for your hive trading? Did you happen to catch the bounce last night as well?
I'm using Binance.
No, my sell order was not activated last night :)
... it was 107 satoshi away from the max
That's a bummer! I was able to sell about 2800 HIVE to HBD during the spike at a price of around 0.97. Will be looking to convert it back at a price around 0.80 this week, unless HIVE continues to stabilize around 0.90.
It's the result of the powerup day which temporary removes selling pressure
I've heard that theory before but I'm not convinced that is the case with these spikes and last night there was another one, which happened outside the Power Up Day activity. The last PUD was under $50,000 in value powered up and that's peanuts compared to the size of these spikes. I really don't think Hive PUD has any effect on Hive prices since it is so small in scale. These first week of the month price spikes are driven by over $500,000,000 in volume each time. The spike we saw last night was over $100,000,000.
Thank you for this detailed article. I don't have Binance account yet so I use the same method to practice trading. Just one question, i havent tried the convert to hive method before so just want to know if it is better than buying from market? I don't know if I can set up a buy limit order on Hive wallet, however, with the option of buying it in the wallet, I have to check the price everyday to decide if it is good time to buy or sell
Hi Dora, thanks for stopping by! The Convert to Hive method has it's good and bad qualities. The good side of it is that it assumed each HBD is worth $1 of HIVE. So when HBD is trading far below $1, the convert feature is giving you a little bit of extra value there. However, the downside risk is that the amount of HIVE you get in the conversion is based on the future 3.5 day median price of HIVE.
When you use the market to buy or sell HIVE/HBD, you know exactly what you are getting in your trade. When you use the Convert to HIVE feature, if HIVE moves up in price a lot during that 3.5 days, you could end up with less HIVE at the end of the conversion than if you had just bought it on the market manually.
In my example, I waited until HIVE had stabilized (and hoped it would continue to be stable for 3 days) and also when HBD had dropped in price to around 0.92 before I initiated the conversion. I would suggest you try converting a very small amount of HBD to HIVE first to see how it works before initiating a large conversion. It's always best to try new things with very small amounts first! That way you will know better what to expect if you decide to start trading using the conversion method.
!PIZZA
That is a great idea. I can always start with a small number to see how it works. Thank you so much for explaining this to me :)
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Congratulations
You are really smart
Good things go to those who pay attention and awesome job on making a larger steak!!!
Awesome job thank you for the knowledge and I am on tribal decks and I put up by and sell orders all the time.
While I wrote this article about a monthly trend that was occurring in the beginning of the month, there was just another spike the last few days too. I hope you were able to take advantage of it! !PIZZA
Actually yeah I've been able to take advantage of a couple times especially if you're trading. Definitely a good time to trade then.
cool thanks for the chat the other day and this post which clears it all up.