The quick answer as to when to HODL your crypto is easy.
Always HODL a crypto you think has promise.
When it takes off you can easily make a huge return on the capital appreciation.
However a friend of mine has a difficult dilemma in this current bear market for the HIVE token.
Here is the situation:
She is a seamstress and wants to create her own business making clothing. Now I don't know what the market is like for handmade clothing but I'll assume she has done her market research and found that it is a viable livelihood for her.
She has many items she needs but is down to a Mannequin and a Grumet. I have no idea what a grumet is so lets assume she is looking for a mannequin for $100 USD.
Source: Pixabay
Her words to me are these:
But I don't know if I should sell them (HIVE) cheaply now and go ahead with the purchase or wait a little more if price will appreciate (I need your counsel on that,
Now for a little more information:
Her current financial situation:
- 12,000 HIVE
- 1,000 HBD
- Recently lost her job
- Works on her family farm
She has worked hard for those HIVE tokens and has seen them at much more than their current value. The thought of selling them cheaply would be upsetting. However, the thought of being unable to follow her dream of being a seamstress is also upsetting.
My Advice
Honestly.
I do not know what the future holds and I could absolutely give the wrong advice no matter what I choose.
My View on the Situation
I will however analyze the situation as I see it.
How I see it is this.
INCOME is the key to actually living day to day
HODLing a big cache of cryptocurrency for the future might make you rich in the years to come. However, being rich later is of no use if you starve in the meantime.
HODLing a big cache of cryptocurrenty for the future might mean you end up with absolutely nothing if the currency doesn't take off. There are dozens of cryptocurrencies that have faded to obscurity never to be resurrected.
I don't believe that HIVE will fade to nothingness but I do know that it hasn't reached "Prime Time" for market adoption yet.
feel free to HODL crypto forever AFTER you make sure you have food on the table, a place to live, clothes to wear, water to drink and the utilities are paid
What gives the best regular income?
Now. Looking at her current mix of 1000 HBD and 12,000 HIVE.
What is more stable? HBD which is pegged to the USD or Hive? With the recent US Debt Ceiling drama I'm almost tempted to say the HBD. However, seeing how far HIVE has fallen I'd say that HIVE is more volatile.
How much is that HIVE worth in USD? About $3250.
How much is that HBD worth in USD? About $1000
What is the current income on $3250 HIVE
- My curation with #HivePakistan is payout out is roughly 7.5% paid daily.
- My personal curation efforts payout roughy 5% paid after 7 days.
- There is an additional 2.99% interest on HP.
I'll put the income for the HIVE at just over 10% as an estimate which means income of about say $365/year or about $1/day
What is the current income on $1000 HDB
- HBD has an interest rate of 20% which is paid monthly.
That means the $1000 in HBD would payout $200/year or about 50 cents daily.
First "What-If"
What if all those HIVE were converted to HBD
That would make $ 4,250 HBD which would mean income of $850 / year
of stated differently that would be $70 / month. Which she stated would be more than her last job that she got laid off from.
Second "What-if"
Let's say that she sold off $100 HBD worth of Hive.
Now she has the physical assets required to become a seamstress. That $100 is the difference between having a job and livelihood and being unemployed with a dream.
How much would that cost her from he investment income?
$100 @ 20% is $20 / year of just over $1.67 per month.
Is she likely to make more than $1.67 monthly as a seamstress? I don't know but I certainly hope so.
My final thoughts.
With her current mix of assets she would be bringing in roughly $47 / month. That's not a lot of cash to try and live on...even if the farm does bring in the food.
If it was all converted to HBD that amount would rise to $70/month. Way better than $47 but still very modest.
If it was converted to HBD but an investment was made in equipment to start a business then she would be bringing in $68/month and have a business which has the potential to bring in much more.
Even if HIVE suffers a catastrophic failure she would have a business to nurture. Diversification in both Crypto and Real world assets seems like a safer play to me.
Anticipation of her main objection.
Now I know her...at least a little bit.
I'm pretty sure that her main objection is this: IF she powers down her Hive and buys the business equipment as I mentioned and converts the rest to HBD as i would also suggest then two things happen.
She will miss out on the next bull market for HIVE. Unfortunate but I'll take a job and income for now rather than a lottery ticket on a future windfall myself.
She will not be able to curate her friends posts and share the wealth with them. I know that is important to her but there is a reason airplanes say put on your airmask first before helping a child put on theirs. You cannot help another person if you can't first help yourself. If you can become financially stable and have enough to stand strong then you are far better able to help those around you.
Final thought.
Many new businesses look for investors in their business to get started. If you prove yourself to be reliable and hardworking you might even find fellow hive members who would be willing to help you start your business.
Just my thoughts.
Not financial advice just how I would approach this problem myself
This is an excellent one Tergan. Very solid and detailed analysis. While not giving financial advice, I would recommend she strongly weighs her options in line with this your solid analysis here.
Still, I would always recommended partnership, since we have to deal with a lot uncertainties, if risks can be shared, it can go a long way.
Nice one again!
This is beautifully written and thanks for Delegating to hivepakistan. We may not provide the best revenue according to other projects but we need those delegations to make our project financially stable. We are on hive for 1.5 years approx with @hivepakistan account and discord. Recently we started taking delegations.
hehe... thought it was a good place to put in a plug for your initiative 😁
honestly though you have a good payout as you pay in HIVE and not a different altcoin.
As for delegating.... Pretty important to do. Delegating helps curators rewards good content which in turn gets help with retention and content creation. Ideally that leads to a bigger userbase and hopefully more money coming into the system. Makes or a healthier hive in the long run.
Just stuffing money into HBD and collecting the interest is a net drain on the HIVE system and not idea for growth. Important to help people get stable income from the blockchain though so very glad it is there.
Glad you dropped by though. Really appreciate it
In future if our tech improves I am thinking of adding defi along with current perks.
Same can be bad for hive if it turns into farming, circle voting and more. Generally, I agree it helps.
I am usually intrigued by the pattern to which you analyze which in most times, emits wisdom and knowledge.
Well, in simple terms, I'll advise opportunity cost. She can't put all her eggs in a basket. A second source of income is essential.
I'll advise she sells off a little to have the basics she would need for her off-hive business and as well, put a little more effort.
The top does not get easier. It'll be bad if she loses majority of her assets and loses out of the bull run.
Perhaps some discipline of percentage will also help. Meaning, for every income, let her split them in percentages over time such as savings, emergency funds, working capital, etc.
By and large, she needs to DYOR to know what's best for her, she's the wearer of the shoe and would know where it pinches her the most
Did I miss out on something? Your start implies that this time I got it wrong.
I personally look at HIVE like a stock more than a currency due to its inherent volatility. #1 rule of stock market is not to invest what you can't afford to lose.
I personally look at HBD like a US$ Savings account with a 20% interest rate. I like savings and I like 20% interest.
I also think having a livelihood off HIVE is very important because while I believe that crypto has a bright future who knows WHICH crypto will be the one to take off. I mean I'm Canadian...the country that founded the Blackberry. Look what happened to it after the iPhone came along.
I'm lucky. All the HBD and HIVE that I have is like play money to me. I made it from playing Splinterlands and Cubieverse. If I lose it all then its no big deal to me. For other people it is a far more important financial decision.
Missing out on a bull run? Ohh...that stings. I know because I sold $2000 worth of bitcoin when it was at $5000. Kicking myself on that one now. I also sold Monero/XMR at 0.25/coin and it is at $141 now. Then again, I bought $5000 in Tesla stock at $18/share near the IPO and doubled my money and cashed out at $50/share. I cried when it hit $2000.
At the end of the day you have to do your own research. Come up a plan that makes sense to you. Then live with the consequences. Regardless the outcome.
Sorry if this post didn't make the grade for you. I'll try harder next time 😎
I guess she meant to mean highly impressed and or fascinated
I hope you are right... when I see usually to me it implies most times but not this time making me wonder what I got wrong.
But I will just keep doing my thing and work for turning that usually into always
.. even though I know that isn't possible 😀
The way we use English here can be kinda problematic for those in the West to understand. U know we aren't native English users, so we miss some marks sometimes. Trust me!
My wife is Filipina, I know a thing or two about slip ups in English 😎
After reading this over and over again... Maybe like the 4th time today.
I couldn't think of the best reply to give for this great analysis and wealth of knowledge
But regarding what to do, I have made a decision and it will be executed in no time..
I have missed out of saving some stable coin such as HBD for today but after this blog I see so much reason why.
I managed to save 1000hive in my savings, instead of leaving it at 1000HBD...
"1,000 HBD ". This doesn't really exist like you said in your post.... It is 1000hive instead...
I truly apprentice this valuable response.
Shhh.. I didn't mention your name. Maybe it was a different seamstress ;)
However, according to your hive wallet :
HIVE
52.918 HIVE
HIVE POWER
APR interest rate for Hive Power is 2.992%
11,336.821 HP
HIVE DOLLARS
Tokens worth about $1.00 of HIVE.
$ 0.060
SAVINGS
APR interest rate for HBD($) is 20%
1,000.000 HIVE
And you might be right. It was 1000 HIVE in savings not 1000 HBD. Proof I absolutely make mistakes! Honestly I never put HIVE in savings. If I'm locking up my crypto I want the interest on it :) I'm very cheap that way.