The Hive blockchain launched on March 20, 2020. Over the years, Hive has managed to improve its underlying technology, retain a solid user base even during bear markets, and offer a decentralized social media platform, an algorithmic stablecoin, and a variety of games and apps.
Recently, I noticed a "hockey stick" movement in the crypto markets for many major tokens – except for Hive. This prompted me to dust off an old comparison model and re-run the numbers.
Hive (HIVE) Compared to Major Cryptocurrencies
For this analysis, I compared Hive (HIVE) with leading blockchains: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), and Ripple (XRP).
HIVE v BTC v XRP
HIVE v ETH v BNB
Price Performance (01.04.2020 – 02.12.2024)
- BNB: +5104%
- ETH: +2684%
- BTC: +1415%
- XRP: +1170%
- HIVE: +68%
Hive's performance lags significantly behind the other major cryptocurrencies.
Why Analyze Correlations Between Cryptos?
There are several reasons to investigate correlations between different cryptocurrencies:
- Diversification: As the growth (and decline) of crypto market caps reshapes asset allocations, understanding correlations can guide diversification strategies.
- Volatility Management: Cryptos are notoriously volatile. Knowing correlations helps protect portfolios from excessive whipsawing.
- Dynamic Markets: The crypto market is ever-changing, and correlations can indicate which coins to add or divest over time.
- Portfolio Adjustments: It can also help in reallocating between cryptocurrencies and other asset classes.
Hive's Correlation with Other Cryptocurrencies:
- HIVE to ETH: 0.55
- HIVE to BNB: 0.40
- HIVE to BTC: 0.20
- HIVE to XRP: 0.47
One of the common views in crypto is that Bitcoin dominates most price movements. However, for Hive, this is not the strongest correlation. Instead, Hive is more closely aligned with the multi-purpose chains Ethereum and BNB Chain.
Correlation Between Major Cryptocurrencies:
- ETH to BNB: 0.91
- ETH to BTC: 0.85
- ETH to XRP: 0.74
- BNB to XRP: 0.64
- BNB to BTC: 0.86
The high degree of correlation between ETH and BNB is unsurprising, as both are EVM-compatible chains. Bitcoin supremacy remains evident: both ETH and BNB have stronger correlations with BTC than Hive does with any of them.
What is Correlation?
Correlation describes the relationship between two variables, where a change in one is associated with a change in the other. It measures both the strength and direction of this relationship. For this analysis, I used daily percentage movements in cryptocurrency prices and applied the Pearson correlation coefficient, which ranges from -1 to 1:
- -1: Perfectly inverse relationship.
- 0: No relationship; changes are unrelated.
- 1: Perfectly positive relationship.
As a rule of thumb:
Values > 0.75 indicate a strong correlation (though this can vary by field).
Data Sources
- Daily market data from CoinGecko.
- Period observed: 01.04.2020 – 02.12.2024 (1,707 days of data).
- Cryptocurrencies analyzed: BTC, ETH, BNB, XRP, HIVE.
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