Let's imagine just after the hard fork away from Steem in 2020, you had $100 to invest every month.
You could power up Hive and set it to auto-vote following a curation trail. Alternatively you could invest in Bitcoin, storing it in a cold wallet. There's also the old-school solutions, put the money away in a savings account, or invest in the stock market. Let's simulate all 4 options.
Note: This is mostly a retrospective analysis. Past returns are not indicative of future returns.
Assumptions:
Bitcoin. 2% purchasing fees. Assuming that transaction fees are inclusive of that. This may be a generous assumption depending on what your options are in terms of crypto exchanges.
Hive. 3% purchasing fees, because you probably have to buy Bitcoin first. The simulation is based on Vests, so includes the base rate of return. Returns on curation: Each day with a delay of 7 days, you get 0.0219% in curation rewards. This is based on an 8% curation APR. This is also assuming you do not post or blog or get any rewards other than the curation rewards from following a voting trail.
USD Savings account. I applied interest based on an APR of 0.06% every thirty days, a typical interest rate for USD in recent years. No fees.
Rather than use real stock market data as I'm not sure how to get it inclusive of dividends etc., I simulate the portfolio the same as the USD Savings Account but with an APR of 10% - average S&P annual return for the last 10 years.
Results
Initially Bitcoin was well ahead for the first few months. However, the Hive auto-curation approach started to become competitive in early 2021, and in late 2021 it was well ahead. In the last few months however, it has dropped just below the Bitcoin portfolio again.
Hive auto-curation was behind the savings accounts for the first year, but only briefly ever dropped below it again in the simulation.
| Investment | Final Value |
|---|---|
| Hive | $5220.85 |
| Bitcoin | $5511.54 |
| USD Savings | $4149.34 |
| High Interest Savings | $4857.91 |
Conclusion
As long as you include the returns from curation - powering up Hive has been a good investment from 2020 to 2023. However while the returns have been good, it can reasonably be considered to be a very high risk investment.
Image source: https://adamfayed.com/15-mistakes-to-avoid-when-investing-in-bonds/
Edit: I had to make some corrections as the fees were not correctly included for all purchases of Bitcoin and Hive initially. It did not change the overall conclusion but did lower the final numbers.