You may have heard about rumors concerning Huobi's COO arrest.
This may or may not be true, but it is definitely impacting Hive's price massively. I am writing a post to explain why quickly.
People have been withdrawing crypto from Huobi massively the past few days. Huobi Token also crashed 16% since the news.
Why is this affecting Hive?
Huobi is one of the largest exchanges for Hive. Deposits and withdrawals are still not allowed since the hard fork, even though other exchanges allow hive transfers.
The denial of withdrawals + the FUD is causing a massive price crash for Hive. Users that own other cryptos are just withdrawing to their wallets or another exchange. Since hive withdrawals are blocked, users who want to move their funds out of Huobi because of all the news have no choice but to sell their Hive.
They are selling for USDT and BTC and then withdrawing. This is happening on such a scale that Hive trades at a 20% discount on Huobi!
Hive is currently trading at 11.21 cents on Binance but 9 cents on Huobi. This is bad for two reasons.
The sellers on Huobi are not necessarily buying back hive on other exchanges, especially when they will take a 20% hit on their hive if they do.
Coingecko is taking Huobi's price into its calculation, showing a lower price for Hive than the actual market price. Coingecko's price is 10.7 cents while all exchanges except Huobi trade above 11 cents. Because of that, price data looks worse on Coingecko than it really is and might cause some traders to sell (or prevent them from buying). Most people sell coins when they go down, sadly.
What I'm doing
I know I shouldn't touch anything close to Huobi at the moment. The risk is not worth it... but who can resist Hive at 9 cents?!
I've sold my hive on Binance and bought back on Huobi. I'm also slowly selling Bitcoin for Hive on Huobi.
The news really looks like random FUD, which happens a lot in China. They spent the last two years with massive rumors on banks collapsing, causing a run on banks. They also had some Binance FUD a few days ago. Now it's Huobi's turn.
Given all of that, I am okay holding hive on Huobi. Let's see what happens. Hopefully, I don't get rekt.