I have been thinking of stashing some HBD away to earn the 20% interest per year. This should be part of my profit-taking strategy.
But as you may know, turning fiat to crypto incurs some percentages of fees. This would mean that the actual profit earned through the HBD interest could be lesser.
Anyway, this is a strategy I am thinking about, which I think could help complete the transfer from fiat to crypto HBD with as little loss as possible.
It will involve buying Hive, which could possibly go down in value, but it is fine with me as I can afford to use it to power up to boost my account for the longer term if it did.
This is how it might go.
First, I need to buy Hive using my credit card using TRANSAK.
Based on the above: USD 100 to 259.19 HIVE = Price of Hive as $0.3858.
Clearly, that is more expensive than the current rate ($.0.358280), based on what is shown in the internal market.
Exactly, how much will be lost if the newly purchased Hive is sold immediately at the Hive market?
For every Hive, $0.3858 - $0.358280, i.e., $0.02752 will be lost. That is 7.13% of the buying price, based on this: $0.02752 / $0.3858.
In other words, the cost of transferring fiat to HDB using this method is a loss of 7.13% immediately.
I would need to set a selling price of $0.3858 in order not to incur the loss. That is what I should do if I wanted to recoup my fees when converting from fiat to crypto HBD.
7.13% hike might not be a long wait, especially if the price spike suddenly. Having the sell order set up and hit could help me recoup the fees.
Since I am already taking some risk, because that might not happen, I might as well consider setting the selling price higher to lock in some profits.
Say, I can set to sell Hive at 20% profit, i.e. when Hive hits $0.3858 x 120%, i.e. $0.4629, sell all. That way I would have turned my USD 100 into USD 120.
Once that is activated, park the $120 into HDB savings to earn the 20% interest. Supposed that happens within a year, I would have earned my 20% sooner, and simply let it stay as HBD subsequently.
Of course, my goals and situation could be different from yours. I am coming from the angle of regular DCA with a small amount, with the intention of locking profits to store in HBD for the 20% interest.
I believe when the price moves up, I could reduce the cost of converting fiat to HBD this way. Even if it dips further from the selling price, I am ok to turn my Hive into HP, because I am supposed to DCA in this bear market to the point that I hit my target of 10000 HP anyway. That would be a losing bet, but I believe the risk is already reduced due to DCA.
If you have a better strategy, I would love to hear it!
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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