Investors prefer investment instruments with low price volatility. The situation differs for traders; they like high volatility because prices must move quickly to make money. In the long run, the price of financial assets investors prefer increases. The price of the assets the traders prefer can move in both directions.
I have been following the prices in the crypto market daily for five years. So I know roughly the price dynamics of the top 100 coins. It is essential to see how much resistance a coin can show on days when prices fall rapidly. Bitcoin and Ethereum stand out as the most resistant coins. Interestingly, coins of decentralized networks other than Bitcoin and Ethereum are falling fast in times of crisis. I guess a central authority controls the price of coins with low price volatility. Currencies of networks like Solana, Polygon, and Avalanche are losing value rapidly. This rapid depreciation shows that prices are formed naturally in the market.
From the perspective of traditional finance actors, high price volatility means high risk. Indeed, coins from major networks such as Bitcoin and Ethereum stand out as the lowest-risk assets in the crypto world. On the other hand, the preference for low price volatility can sometimes mislead investors. Because the authority controlling the network, whose price volatility is kept artificially low, may one day decide not to support the price anymore. In this case, the accumulated tension on the coin can lead to much more significant price drops.
The higher the value created on a network, the more resilient we can expect it to be. Blockchains have undergone a massive transformation over the past few years. Falling prices and expanding usage areas have narrowed the gap between the revenue generated on the networks and the value of the networks. If a network is used for purposes other than speculation, it will continue to be active when the flow of funds reverses.
There are dozens of digital assets on the Hive network. We can list the most important as Hive, HBD, SPS, Leo, and Splinterlands cards.
We are currently in the last months of the bear market, and we cannot claim that Hive is performing well. Compared to Splinterlands and Leo, development activities in Hive could be faster. Or the developers working for Hive are not effectively communicating their results to us. Projects using the Decentralized Hive Fund funding would better report to the community quarterly. The executive board submits quarterly reports to the board of directors in companies. A copy of the quarterly report is also prepared for investors. Thus, the works done quarterly are reviewed collectively. Community members, who are potential investors, can be motivated thanks to these reports.
HBD, the stablecoin of the Hive network, has become a favorite asset in the bear market. The bear market did not affect those who invested in HBD at the beginning of 2022. Moreover, they achieved a return of over 30% in 20 months. Thanks to its mechanisms to provide resiliency, it is among the most valuable products of the HBD Hive network.
Another digital asset that performed well during the bear market was Splinterlands cards. While the value of many play-to-earn coins has dropped to one-fifty, the cards have performed close to Bitcoin. As a Splinterlands player, I understand why the cards have depreciated slightly. Players use cards and can only win battles with them. The gradual burning of the remaining card packages and the creation of new use cases for the cards were among the factors that supported the card prices.
The SPS staking requirement introduced supported the SPS price. Still, SPS performed poorly, similar to other play-to-earn cions. On the other hand, SPS will also likely outperform cards in a bull market.
Development activities continued unabated throughout the bear market on the Leo Finance front. The implementation of the Leo Threads project supported the Leo price. In 2021, the cost of Leo was one-tenth of the Hive. Currently, the price of Leo is hovering around one-sixth of the Hive. So it performed better than Leo Hive in the bear market.
The flexible ones do not break. High volatility indicates that prices are formed organically in the market. In the bear market, Bitcoin and Ethereum prices performed relatively well organically. Some low-volatility coins are priced by the billionaires who support the network.
Resiliency is closely related to the ability of ecosystems to create value/income. Innovation enables the creation of new uses for digital assets. This activity has a reducing effect on price volatility.
During the bear market, decentralized crypto networks were put to the test. They have proven that they can survive when the flow of funds is interrupted. Many more magnificent buildings will be built on the strengthened foundations when the flow of funds resumes.
Thank you for reading.
