HBD - Back From the Brink of a Haircut??

He he, who doesn't love a good mixed metaphor on New Year's Eve?

Perhaps it would have been better to title this post "HBD - Back from the Brink of a Hot Bath" because I'm seeing in the New Year with the Mrs and Daughter at Gero Onsen (下呂温泉),

"referred to as one of Japan's three best hot springs by the leading Confucian scholar Hayashi Razan," ( https://www.japan-guide.com/e/e5990.html )

whoever he was when he was around.

We are going to see in the New Year in a couple of hours by heading up a bunch of stone steps to visit Onsenji Temple where 108 ginks will take turns to bash the temple bell to see in the New Year. I'll post some photos in my next blog post...

But what I want to talk about tonight is:

• how we have seen a bit of a recovery on the Hive and HBD front in the last seven days or so,

• and how that has affected my allocation of this month's HBD interest payment...

The Seemingly Inevitable HBD Haircut

For the last few months we have seen the HBD debt ratio creep closer and closer to the 30% limit that would trigger the "haircut."

I wasn't really sure what the "HBD haircut" was so I put the question to Chatgpt and post the answer here just in case you also don't know:

I started using this tool to track the HBD debt ratio: https://hbdstats.com/

I watched with some dismay as the percentage broke 17% and then 18% and seemed to be speeding towards 19% as the value of HIVE dropped below the 10 cents floor, apparently tracking Bitcoin as it dropped below $100,000.

I began to think that HBD would get its haircut sooner rather than later and since I have been an HBD stacker for the last couple of years, I realized I ought to create a contingency plan so that I would have a clear strategy that would be a bit better than "PANIC SELL"!

My HBD Management Decision Chart

So I spent a couple of evenings coming up with my own "HBD Management Decision Chart" - with the help of Chatgpt. I decided that my personal cut-off point would be a debt ratio of 18%.

If the HBD debt ratio was above 18% when the monthly interest landed, I would NOT add it to my savings total, but instead I would:

• keep 10% as liquid HBD
• sell 50% and buy HIVE
• sell 40% and buy BTC

That is what I was fully expecting to do when my interest payment landed at the end of the month.

My longer term expectation was that as the HBD debt ratio increased, and if the price of HIVE continued to drop, then more and more HBD would be sold and that the self-regulating tendency of HIVE/HBD would pull HBD back from the brink of the haircut!

Hive and HBD recover some ground

And then, against my short-term expectations, HIVE managed to crawl back up towards 10 cents over the last seven days (though it's dropped away a bit today):

Source: https://www.coingecko.com/en/coins/hive

At the same time, we have seen the HBD debt ratio pull back from 18% to 17.49%:

Source: https://hbdstats.com/

That was the state of play when this month's interest payment landed and so my personal "management decision" has NOT been triggered this month and it is business as usual. In other words, I added the interest to savings to keep on compounding...

Who knows whether this mini-recovery will last and turn into something more solid, or whether the downward trend will reassert itself and trigger my "HBD Management Decision" in the New Year.

However, what I now have in place is a clear strategy for (1) accumulating HBD and (2) responding to the haircut threat whenever the debt ratio is over 18% when the monthly interest payment lands.

And now it's time to head out and see in the New Year to the sound of temple bells!

Cheers - and Happy New Year!

DH
#InspiredFocus