While I don't disregard the possibility of intentional pumps, my theory is slightly different and has to do with SBD.
We have seen in the past that how SBD is kinda treated in market without any regard to its original purpose to be a peg to USD. We have seen the same recently.
When I look at SBD chart, it seems to me it started moving up significantly right around the same time BTC started its bull run. What I take from that is that some traders are just treating it just like another crypto coin that may keep increasing in price. That may also be due to its low market cap.
SBD has been above $3 for four months now and above $5 for couple of month.
So, what I think is some traders maybe speculating that HBD may follow the same path due to the similar characteristics it has with SBD.
In other words, some people may not want to buy BTC because it may seem too high in price, and buy other alternatives like LTC, ETH, BCH, etc instead.
The trouble is geekgirl, we use HBD for something. We use it to fund our proposals. If a proposal was funded for 100 HBD/day. It is supposed to get $100/day.... not $200 or $700.
That's the problem. Steem or SBD doesn't have that problem. They can run amok.
Yes, I agree. It's just market doesn't seem to understand that. :)
That's ok, we're going to try to teach it better. And the DHF is getting paid to do the tutoring.
I was asking themarkymark the following on his post. If I may ask you as well since I also have a follow up question.
Could you help me understand this?
For simplicity purposes let’s say market price for hive is $1, and hbd $2.
Is this how it works?
If this is how it works, why not make this part of the blockchain code when dhf or designated internal account does what hbdstabilizer is doing but with larger amounts based on market conditions. Sort of an internal AI. It seems like this process works and it is only matter of amounts used for it to be successful in establishing upwards peg for HBD.
Assuming HBD is above $1, this would work.
However, since it isn't always, and you need to know the actual price of HBD at the time to decide whether to trade it for HIVE or just send it back. There isn't any easy way to do that within the blockchain. A mechanism to do so could be built, but it doesn't exist and isn't trivial.
I think this DHF fix is just the temporary cludge which can be done without hard forking and the only real answer is the internal market for HBD that means all of us can attack a pump if we want to.
We can defund all, simple.
Like they return the overvalue or defund. Lordbutterfly for example does all super transparent. Like the price, he sells HBD for the marketing proposal.
Sure defund is not a master solution, but nothing is with HBD :D
That's what @blocktrades did (and some other stakeholders may have adjusted votes by now as well, I'm not sure). He said he was going to make another post more directly about that aspect of it soon.
@geekgirl Well I think it is something of both, between your assumption and that of @blocktrades, because as you say they do not have deep knowledge and not really because they are fools (at least they are losing money due to the rapid loss of hbd) Well the capitalist principles of supply and demand obviously "coordinated", call this malicious, because if making money is malicious, let's say yes. I'm not as drenched in information as you are, but I know this was neither random nor coincidental. But I'm also pretty sure it didn't turn out the way hdb buyers expected.
That's basically what I was suggesting with the other possibility, although you've explained it more depth: "a completely random increase by really bad speculators (relatively unlikely I think)"
It is certainly a possibility, but it usually takes coordination action to get real price movement to happen in such a case. That still doesn't mean they are pumpers, they just might be a group of bad investors acting together, but the selection of HBD as the coin to invest in, which receives no real advertising and has very small volume, makes me believe it's an intentional pump attempt.
Spontaneous action can drive further spontaneous action in a positive feedback loop. I don't think it is unlikely, I think it is the norm in markets that are highly disconnected from a real world source of value, and information about what they are purchasing (huge numbers of crypto speculators choose cryptos based purely on the shape of the trading chart).
One large buyer can do that, but otherwise it takes a bunch of small buyers. I'm fairly familiar with what it takes to move markets of varying liquidity, because we have to operate trading bots as part of our business for inventory purposes. I've found that small trades even in illiquid markets like HBD don't tend to move the price in a way that can trigger a big price change.