Let's do some mental gymnastics!
I am an investor in WORKERBEE. All of those I owned are staked to earn BEE. To read about why I invested in WORKERBEE, check out this post.
I recall that I bought at 2.5 Hive per token. There was a seller listing tons of WORKERBEE for sale at 2.50 Hive about a month ago. I found that expensive, and placed a massive buy order at 2.40 Hive instead. That never got activated.
It has now shot up to 3.70 Hive per WORKERBEE. If I wanted to buy more WORKERBEE, I had to pay way more than 2.5, it seems. How happy should I be happy with the green candles?
This seems complicated, actually. Making sense of the profits and losses in the layer 2 tokens can call for some mental gymnastics.
Indeed, how do I make sense of the spike in WORKERBEE price, in the face of decreased Hive price?
I know I had to rely on the spreadsheet to make sense of it. A calculator will do, but I prefer to use a spreadsheet. See below for the pretty output.
Now, let me walk you through it.
On 29 Nov 2022 (See row 1), when WORKERBEE costs 2.5 Hive apiece, to buy 100 WORKERBEE, it would cost 250 Hive, i.e. 100 x 2.5 = 250.
With the price of Hive going at USD 0.35 then, the cost to buy 100 WORKERBEE was USD 87.50 since I had to pay with 250 Hive (i.e. 250 * 0.35 = 87.5).
The price of WORKERBEE in USD terms becomes USD 0.88 per piece (USD 87.50 divided by 100 WORKERBEE). Note that there is rounding off in my spreadsheet calculations.
Based on the prices dated 27 Dec 2022, I have to fork out USD 103.6 to buy 100 WORKERBEE today. That is 18.5% more expensive taking the original cost of USD 87.5 as a reference.
If I am using new fiat to buy the WORKERBEE now, I will be forking out 18.5% more because I am buying them about a month later. I was originally thinking of getting more WORKERBEE, but no thanks!
Now that we have come this far, let's check out how potentially silly would I be if I use my previously purchased Hive (at USD 0.35) to buy WORKERBEE today. That is, instead of injecting new fiat to buy WORKERBEE, I use those Hive purchased at USD 0.35 before the recent drop.
The calculation above suggests that my cost for the 100 WORKEBEE would be USD 129.5, or USD 1.30 per WORKERBEE.
This exercise taught me that it is important to do the sums when investing in layer 2 tokens. Hopefully, you learned something and replicate this for the layer 2 tokens of your choice when you want to make an investment.
It is not that difficult.
P/S: This is not financial advice, and please do your own due diligence before investing.
If you read this far... and if you are a like-minded Hiver who is on the path to learning more about Hive and crypto investing, and if you like to be tagged when I write such posts, I welcome you to leave a comment below and let me know. We can form an alliance to support each other's growth.
You might be interested in this post, @jacoalberts, @young-kedar, @svanbo and @hankanon!
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