September is here. We are entering the most interesting phase in crypto market cycle, I think. Bitcoin and crypto prices have been boring in August. While we did see some price movements, for the most part 60k for bitcoin seems to be a magnet price point. It is acting almost like an algo stable coin. If prices goes higher than 60k, shortly it is pulled back to 60k. Same thing has been happening if it drops below 60k. Things may change this month and upcoming months, I hope. Fed is planning to cut interest rates, presidential elections coming up in the US, more and more institutions are considering bitcoin or bitcoin ETFs for their portfolios. Even if none of these played roles in price action, scarcity of the assets only works for the benefit of the hodlers. I am looking forward for some big moves towards the end of the year.
There has been a big change in HBD world. Hive no longer pays 20% APR for hodling HBD in Savings. Hive stakeholders and witnesses decided to lower the interest paid for HBD to 15%. Currently, there are 6 witnesses still signaling 20% APR. But that is not enough. So, 15% APR wins. I personally did not prefer lowering from 20% to 15%. I think 20% was just fine, and had no negative impact so far. I can see how many would reevaluate their positions regarding this after months of Hive price's poor performance. When APR for HBD was initially activated and then later when APR was raised to 20%, the purpose for most was to make HBD more attractive as a stable coin and use this as a marketing tool. If the initial thoughts played out as they were intended, we would have seen millions, tens of millions pour into the HBD and Hive economy. This would also reflect positively on Hive's price. We didn't necessarily see this, or anything significant. I think that is mainly because HBD is not easily accessible in the market to buy with fiat. Especially for those in the US, it is not easy to buy/sell Hive and/or HBD. But also, many in the crypto markets haven't discovered HBD yet.
With this experiment we have discovered that APR is great tool for HBD, and has many benefits. It may not attract hundreds of millions at this time. But it does provide optionality in investing within Hive ecosystem. That is great all Hive participants. 15% APRT is not bad either. What is concerning for me is that, lowering the APR broke the consistency in monetary policy. Hive paid 20% for years without any interruptions, and almost became an unchangeable thing, although we all knew it could easily change. On one hand I hate to lose this long streak of unchanged monetary policy, on the other this may actually be educational for investors that to consider possibilities of APR changes.
There are differences of opinions regarding the APR. This change also shows that Hive works as intended. Ultimately stakeholders pick up the tab for all Hive expenses, and their votes matter in these decisions. Hive witnesses have the freedom to set witness parameters as they choose. Similarly stakeholders have the influence of electing the consensus witnesses who end up setting the monetary policy for APR. All is done in a decentralized fashion utilizing DPOS protocol.
As you can see we have a big drop in the total payments compared to previous months. Hive is still paying a little over $100k monthly, the number for August is significantly lower than July's numbers. In the past I was convinced this number was not going to drop below 100k and it hasn't. But now I am not sure. We may see lower numbers in coming months. It doesn't look like HBD investors are abandoning HBD. Hive is just paying lest in interest payments.
