RE: Is HBD Getting More Stable?

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Hmm, I did not realize there is an opportunity to convert HBD to Hive and then use the Hive to buy HBD, and then repeat the process. Would it really work? If it works, it means free Hive. Somehow I think people would jump on the opportunity to make free Hive. What is the catch? Why aren't people converting and making free Hive?

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It works as long as it is timed right. It does open up opportunities for arbitrage for people.

Of course, with that it all comes down to timing. But it can be a very profitable way to approach things if done properly. People little mint money in their bank accounts by engaging in arbitrage across different currencies, exchanges, and markets.

Big time traders might see this and leverage to their own benefit. Of course, to do that, we need those big time traders doing it on Hive which is not taking place at the moment.

Perhaps with the recent moves and attention to HBD, we will see more people take notice. The larger the market, the easier it is to operate in a tight manner.

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The catch is the risk that HIVE price fluctuations means you might get more or less than $1 at the end. You get the average (median) price over the 3.5 day period which isn't necessarily the same as the price at the end when you receive the HIVE.

Also if HIVE were to drop a lot (around 50% from current levels) there is a haircut rule where you get less than $1 for the conversion. Given crypto volatility that isn't impossible in 3.5 days, but probably still reasonably unlikely.

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Yeah, that's what occurred to me also. So I guess this means that after HF25 HBD will have an upper bound of $1.05 and a lower bound of $0.95 since people will have big incentive (and the ability) to convert between Hive and HBD and correspondingly sell or buy HBD, right? It would put an upper and lower bound to the possible fluctuations. At least the upper bound will definitely be there, which will also greatly help stabilize the lower bound as well due to the reduced upward fluctuation. If I'm understanding this right.

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If by lower bound you mean conversion price, it is still $1.

Convert 1 HBD into $1 worth of HIVE
Convert $1.05 worth of HIVE into 1 HBD

As far as market factors, who knows.

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