HODL in crypto is an acronym for “Hold On for Dear Life”. It is a common meme among the crypto investor community and a play-on-words on the word “hold”.
What is HODL?
It is slang used in the crypto community for buying and holding cryptocurrency, containing a message saying not to sell when the market goes down or becomes volatile.
This acronym came into existence on December 18 in 2013, when a forum member with the handle “GameKyuubi” wrote a post with a title called “I AM HODLING” where it was a misspelled word of “HOLDING”.
According to GameKyuubi, you only sell during the bear market if you’re an experienced trader or a novice investor. The traders only get your money if you sell during a downtrend.
Why is the HODLing strategy important?
Cryptocurrency enthusiasts denote HODL as a mantra for long-term investment plans. This approach by GameKyuubi meant that a novice trader is likely to botch his/her attempts to time the market, and should simply hold their coin.
For crypto maximalists, it represents more than a strategy for dominating power over FOMO and FUD. Long-term investors believe that in the future cryptocurrency will eventually replace government-controlled fiat currency on the basis of economic structures.
But one should always remember, although this strategy has always been proven profitable for the investors who bought Bitcoin at low prices there is no guarantee that it will work all the time.
Alternatives to HODLing
The alternative to HODLing is day trading, where investors make a profit from frequent trades throughout the day, they seek to earn from a more instant profit-making crypto strategy. It represents holding cryptocurrency as an investment while day trading refers to a trading strategy that does not concern itself with holding a cryptocurrency for long.
Is HODLing risky?
The crypto market is volatile and despite the high chances of profit and high return rate, it can be risky to hold cryptocurrencies. As the holders can experience many ups and downs with their assets, which is why they should be ready for both circumstances.