Free market will always work things out...
In my example, there is a player with massive amount of money that is equal or great than the current market cap for Hive. That kind of funds would definitely make big moves in the market, even with slow and steady strategy.
I also assume in free market such price movements would be noticed quickly by other players would also want to participate. These would be new participants of Hive network.
Of course there will always be those who sell. People sell everything all the time, if there is a right price. Selling is great for Hive, it makes the distribution of Hive wider and makes it more decentralized, and networks becomes stronger.
I doubt debt ratio limit would be reached, because upwards momentum of Hive price would hold for very prolonged time until crazy Hive price becomes a norm. (think bitcoin! Those who would sell it for 10k few years ago, won't do it now)
Cashing out or selling HBD wouldn't be immediate, because the investment strategy is long term to earn APR by holding HBD as a hedge or diversification. I would take several years for HBD holder to sell them, or network action that makes APR not as attractive anymore. By this time, there will be plenty more interested in this action. They will gladly by HBD from the seller, instead of paying the conversion fee.
Also, any big price action in Hive or big interest in HBD would make major exchanges to list both, which open bigger markets.
Yes, it is just a theory. But it is a theory I would go for if I was managing $10 billion, and become a fund manager of the year/decade.
And that is why you are not managing $10 billion.
As I said people are already selling at $0.27, they will continue to sell it at $9.80.
Only difference is you would have to buy it at $9.80 to keep the market cap. Since now you pumped the market there is more money in the market than you can afford. Which means market cap would go down pretty quickly once you run out of money to support the price.
And if someone else comes and does the same as you did, now you are even in bigger trouble. If they don't try to support the elevated price, now you need to defend that elevated price or the debt limit would be reached.
This someone else doesn't need to be an instuition, they can be individuals. Any HBD they convert or gain is a nail in your coffin. Because individuals would not defend that price, they would not have the power to defend that price.
And thanks to you pumping the price of Hive to statosphere, everyone is earning ton of HBD.
Even before you can buy enough HIVE to convert to HBD, ton of HBD would already be printed.