Central Tendency of HBD | HBD- as the provident of stablecoins

While $BTC has recovered, the ALTS have not recovered much. The market is all about swings. Highs and Lows create a space for the traders to maneuver.

Hive Blockchain offers a dual token system-- HIVE and HBD. While HIVE is the native currency of the Blockchain, HBD ought to be a stablecoin. And it is different from other types of stablecoins that are prevalent in the crypto ecosystem. It is a protocol-based stablecoin.

Even though it is supposed to trade at 1 USD per token, in actual practice it hovers close to that figure. Well, that is equally an opportunity for a trader to generate income.

Since it is a protocol-based stablecoin, it is the most transparent stablecoin available in the crypto market. It tries to mirror the value of USD as a medium of exchange. It is not backed by USD but rather by the protocol, the Blockchain.

Even the tolerance level of HBD wrt to USD is very reasonable, if not very tight. Most of the time you could find its value somewhere between 0.98 to 0.99 USD.

I have done a little research by taking the dataset of HBD prices from 28th May to 25th July 2024, to ascertain the central tendency of the coin. By definition, HBD is a debt instrument that is supposed to maintain its peg value of 1 HBD=1 USD.

HBD is the best hedge in the Hive ecosystem. The dual token system always gives that leeway for Hivers to switch between HIVE to HBD and vice versa subject to the risk-on/risk-off mood of the market. That way also one can generate some decent income without having to move the fund out of the Hive ecosystem.

Here is the data set of HBD's closing price for the last 60 days to calculate the central tendency of HBD-- Mean, Median Mode, and Range.

_{Source:- Coingecko}

The central tendency of any stablecoin ought to be $1. The distribution of the data set by default is going to be symmetric.

Unless there is an outlier, MEAN is a reliable way to check the central tendency, if there are outliers we can rely upon other measures like MEDIAN and finally, with MODE we can ascertain the highest frequency.

Except for adverse market conditions, you dont see much difference between the Mean and Median. In a stablecoin, they tend to converge always because, by definition, a stablecoin is supposed to trade around $1. If it deviates, the arbitrageurs(HBD Stabilizer in this case) will bring it back to the pegged value.

Taking the data set of HBD for the last 60 days, i.e. from 28th June to 25th July 2024, I have calculated the MEAN, MEDIAN, MODE, and RANGE.

Evaluation:-

HBD is supposed to trade at $1 as that is the ideal central tendency of a stablecoin by definition. However, market conditions in real practice have different and complex dynamics.

From the empirical data of HBD and its performance in the real open free market, it is evident that the central tendency of HBD is around $0.985. MEAN= $0.977, MEDIAN= $0.979. Not much difference between MEAN and MEDIAN. However, it is not close to $1 as it is short by around 2%. But that's the arbitrage opportunity. Just go back to the data set and check how many times it has traded at $1 again. So if you keep on buying at the MEAN to MEDIAN value, you can book profit at pegged value, i.e. $1.

Conclusion:-

Irrespective of the bull/bear market, we should keep some liquid HBD(or in the savings wallet of Hive), that acts as the provident fund of our life.

From the above analysis and from a trading perspective we can still play in and play out between HIVE and HBD to generate some income without having to move the fund out.

The dual token mechanism of the Hive Blockchain and keeping protocol-based tokens shield us from unfavorable and complex market dynamics. In that context, HBD is the driving engine of the Hive economy.

Disclaimer:- This article is intended for educational and analytical purposes only. It should not be construed as financial advice. Thank you.

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