Hive's Debt Is Rising Quickly

It Ain't Pretty

Hive touched 11 cents today and while this is sad to say the least, there is another elephant in the room: HBD.

HBD is debt for our chain and I never really gave it much attention, since Hive's price was well above the critical threshold that signals danger for HBD. But with Hive's price falling seemingly with no end in sight, we should have a closer look.

Curently, the chain's debt is at around 12% (I am assuming HBD's MC is divided by Hive's MC here). As you can see it has risen quite sharply over the last few months. Overall, this is only the fourth time in our chain's history that it has gone above this threshold, so it doesn't happen too often. But if we account for the fact that HBD has only been truly stable since Hive's creation (on Steem it often depegged and was worth much more than $1), it's actually the first time that we have reached this level. What makes it potentially even more problematic is that we are supposed to be in the final stages of a "bull market". So, if debt levels are already this high at "peak", where could they be when the bear rages?

If we actually assume this scenario, the answer is very bleak: HBD will depeg with absolute certainity. The current Hive debt support price is at 5 cents. While that used to be a very far target, it isn't anymore. It's only another 60% correction... Yikes! Of course that assumes we simply fall below 10 cents which (while it already happened in the flash crash), is the only support left for Hive.

What happens when Hive cannot sustain its debt anymore?

We have seen it before and it wasn't pretty. But should it happen again, it's going to be even worse because Hive's price would be actually much lower (before it was mainly caused because HBD depeged).

HBD becomes useless: if it depegs, we could see HBD fall well below $1. I think the last time it was like 30-50 cents? It remained there for many months. We can't really use it for anything anymore. Will HBD's stability/conversion mechanism be enough to stabilize it again?
Hive fund will stop working: All projects that are currently being funded with the DHF will receive a fraction of their payouts. This will cause operators to run out of funding. Essentially, we won't have one anymore until HBD stabilizes again.
Hive witnesses: My knowledge is a bit patchy here, but I think they also receive HBD is part? If so, there is the same problem as with the DHF. An extremely low Hive price would also be problematic as witnesses might not be able to cover expenses anymore. So here it is more of an indirect effect.

Conclusion

If somebody told me that I would post about Hive's debt problems in late 2025, I wouldn't have believed it. Yet here we are. Fingers crossed we actually bounce from these levels and head to a relief rally in Q1 of 2026. Perhaps one silver lining is that a lot of HBD would be converted to Hive at such low levels and thereby reducing the debt of the chain (would that work?). Currently, there is around $11M of debt which would probably shrink quite quickly should Hive's price fall even lower. I guess this would also be motivated by people who wouldn't want to get stuck in holding useless HBD and thereby converting it before hitting the debt threshold.

As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!