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.