If you simply bought bitcoin ten years ago and held it until today, you would have made incredible returns. So the reason people HODL crypto is simple; it seems to pay to be a hodler. Back in 2013, someone with the username GameKyuubi made a post on the BitcoinTalk forum. After a few whiskeys, they misspelled “I AM HOLDING” and wrote “I AM HODLING” instead. Other users found his spelling mistake hilarious and they became ‘hodlers’ too.
The misspelling set off a frenzy in the online world of crypto investors and the term quickly became a meme. Crypto traders began to encourage each other to HODL, or hold, their investments even when the market was volatile. The term “HODL” first appeared in an online cryptocurrency forum in 2013 as a misspelling of the word “hold” — a typo that readers quickly embraced.
The answer to the birth of this concept is the extreme volatility that exists in the cryptocurrency market. The crypto market is known for being very volatile, which can be a big problem and cause huge losses to cryptoasset investors. Many of these investors would take advantage of these sharp rises and falls in the market to make numerous trades in short periods and make quick profits.However, there are others who bet on another type of strategy.
So you buy, you hold on for dear life — hodl — and you build wealth in the long haul. Some enthusiasts have even accepted HODL as an acronym, meaning to “hold on for dear life.” The term is also related to “diamond hands,” which means that you have an unbreakable grip on the crypto you own. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Keep in mind that other fees such as regulatory fees, Premium subscription fees, commissions on trades during extended trading hours, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Open to the Public Investing’s Fee Schedule to learn more. When you buy and hold, you don’t have to worry about market volatility, or watch for every movement in the market to time your sales.
If you have a positive outlook on blockchain technology and aren’t afraid of market volatility, HODLing crypto may be worth considering. However, those more interested in taking an active approach to portfolio management should focus on daily trading over HODL. Hodling sounds a lot like the long-term buy-and-hold strategy The Motley Fool employs in the stock market. Generally speaking, we recommend owning stocks for at least five years. The wealth-building benefits of compound returns make a bigger difference in a longer time frame. The same philosophy should work for high-quality cryptocurrencies as well.
HODLing becomes an ideological belief about the long-term prospects of blockchain technology, cryptocurrencies, and the communities that have formed around them. The term ‘HODL’ was first used by a BitcoinTalk forum member going by the pseudonym GameKyuubi on December 18th, 2013. GameKyuubi wrote a post to the forum titled “I AM HODLING” and proceeded to pen a semi-intelligible post attempting to explain his new investment strategy while (admittedly) intoxicated.
“HODL,” one of the most frequently used terms in the cryptocurrency world, originated years ago from a typo. The term “HODL” is crypto-industry slang for the practice of holding tokens for the long term. In other words, market timing is difficult and risky, and making the wrong moves will lock in paper losses that may otherwise disappear over time.
Other long-term BTC holders who resisted sell-offs started describing themselves as “HODLers,” and HODL culture was born. While it’s used by some people as an acronym for Hold On (For) Dear Life, it actually just means hold – don’t buy more for now, but don’t sell what you have. Generally, the term is only really used in the crypto world, where prices are super flaky and can drastically change at any point.
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Much like the term itself, HODL encourages users to hold onto their tokens for rewards in the Binance coin (BNB) that are distributed every three days. The rewards are generated from taxes collected on transactions made by users, such as sale, purchase, or transfer of HODL tokens. The tax amount is converted into BNB tokens and a percentage of the gains is redistributed back to users from the collective liquidity pool. The prices of Bitcoin and other cryptocurrencies are notoriously volatile, but HODLers disregard even large price swings. Since then, HODL is being described as an acronym for “hold on for dear life” more and more.
To learn more about digital assets and trading strategies, check out our academy. The boldness of GameKyuubi’s post struck a chord with other Bitcoin investors. Shortly after “I AM HODLING” went live, crypto fans began sharing it on social media. Soon, HODL memes flooded the online community—but beneath the humor was an on-point investment strategy.
The term is, however, used to describe huge losses, and even though ‘huge’ is considered a relative term, losing a lot of coins qualifies as being rekt. Now that you understand what it means to HODL, let’s dive into some of the other popular crypto-related terms that are worth knowing in order to participate in conversations amongst fellow blockchain enthusiasts. “Pump and dumpers are people who often say, ‘Hey, let’s all of us together pump this coin,’ which means buy the coin, create the demand in the market, the coin will go up in value,” Saddington says. FUD means “fear, uncertainty and doubt.” Bitcoin followers advise to HODL your coins despite the FUD of those outside the community. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Users can earn rewards in Binance coin by depositing their tokens in a liquidity pool. It is worth noting that there could be some differences between a HODL strategy and the traditional buy-and-hold investing strategy. When people adopt a buy-and-hold approach with stock investing, they often put their money into index funds in the hope of not beating the market but matching it. But long-term cryptocurrency investors, on the other hand, tend to hope for more substantial gains. Not only has “hodling” turned into one of the most popular cryptocurrency terms, it’s also served as a strategy for traders, albeit a basic one, given the volatile nature of the crypto market. This refers to a buy-and-hold situation where hodlers stay invested and refrain from trading when the asset price decreases.
The idea of hodling crypto is to buy a cryptocurrency and hold it for a very long time. To do it right, you shouldn’t take profits when your crypto is skyrocketing, and you shouldn’t back out when prices are going down. Stock market investors often use the buy-and-hold approach for long-term investments, which is effectively the same as HODLing. When you HODL, you give up the chance to invest that money in a diversified portfolio of stocks, bonds, exchange traded funds (ETFs), and mutual funds.
Public’s social investing platform gives you access to a knowledgable and diverse community of fellow investors. By sharing insights and updates on market activity with each other, Public’s users can stay on top of the market and build confidence in their investing strategies. While the SPEDN strategy involves buying real-world goods with cryptocurrencies, BUIDL traders use their crypto to build blockchain applications. The idea behind this strategy is to encourage users to contribute to the development of cryptocurrency infrastructure, which will ideally may raise the value of digital currencies. Saving is all well and good, but can you imagine being able to save and at the same time earn a profit for it? Today we are going to talk about what hodl is and what are the advantages that this strategy can bring.
In a perfect world, you’ll never invest in any of these cash-burning crypto projects. In reality, you’re better off selling some cryptos before they burn too much of your money. Many newer investors will start out HODLing by using a dollar cost-average strategy. This means that you buy a set amount every day, week, or month, which allows you to buy in at the average price throughout your investment period.
Digital currency bitcoin has seen a tumultuous ride in recent weeks, as the price fell to trade below $6,000 per coin in June, down from a high of over $19,000 last year. And, everyone from Warren Buffett to athletes and celebrities have weighed in on the future of cryptocurrencies. HODL is one of those terms that’s shown up amid the rise of cryptocurrency.
Before taking action based on any such information, we encourage you to consult with the appropriate professionals. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article https://hexn.io/ were or will be profitable. Historical or hypothetical performance results are presented for illustrative purposes only. Some crypto traders choose to use other approaches, like SPEDN or BUIDL. While the misspelled terms are send-offs of HODL, these strategies are completely different in their approach.
The ethos and mantra, however, could be applied to any digital currency or even traditional stocks and shares. It’s just more commonly said when it comes to cryptocurrencies, less so tokens. If someone on Wall Street told a client to HODL, they might get looked at weirdly, for example.