The Invisible Hand In The Price Of Steem and Hive
It was Adam Smith, the father of classical economics, who wrote in 1759 in his Theory of Moral Sentiments that there is an invisible hand that ensures order in the economy. A cursory look at the events around Steem and Hive within the past six months suggests that there is an invisible hand that strives to level the price of Steem and Hive, to the extent that none leaves the other considerably behind.
By now, one would have thought that the price of Hive would have doubled that of Steem because of the larger and more robust community backing it. But that has not been the case.
Although at its peak, Hive managed to reach over 90 cents in his formative days, exchanging for over 3 Steem, the invisible hand came to work, clandestinely levelling up the prices in one of the most enigmatic fashion.
Prior to the fork of Steem, which witnessed the birth of Hive, the complain was that Steemit Inc was allegedly flooding the market with Steem, creating an albatross for the progress of Steem. With a new founded, decentralized blockchain in Hive that has the loyalty of the majority of the erstwhile Steem community, the least thing to expect was seeing Hive worth twice as much as Steem.
But apart from the circumstance that was previously mentioned, the price of Hive and Steem upto this very moment has remained only a few cents apart. The invisible hand, it would seem, ensures that the price of Steem does not significantly outperform Hive and vice versa.
What Exactly Is The Invisible Hand?
The Invisible hand, as I perceive it, is the extent to which market sentiments parallel the price of Steem and Hive. Since the latter is a fork of Steem, the market appears to believe it to be overpriced each time it outperforms the former and vice versa. This results to a sell pressure that levels the price of both tokens.
Another dimension to the invisible hand results from big actors who sell off their Hive for Steem and Hive and vice versa, depending on which is outperforming which at any given point in time. The implication is that we tend to see, judging from recent history, the destiny of both tokens being intricately entangled.
In conclusion, the invisible hand may very well still be active in the affairs of Hive and Steem until such a time when either the forthcoming altseason will severe their ties or until when both tokens no longer operates on identical reward distribution mechanism.