Month: August 2024

Cryptocurrency prices are also prone to the movements of whales (a term for people or organizations that hold a very large amount of a particular token). If even one whale decides to sell a particular token, they could tank the price entirely. There’s no question the HODL strategy has paid off well for GameKyuubi and other bitcoin investors that have held onto their crypto investments. The HODL community encourages other investors not to cash out of their crypto when prices rise and not to throw in the towel when crypto prices fall. But these phrases have extended beyond crypto to other assets, such as stocks. During the run-up in the stocks of GameStop and AMC in 2021, individual traders rallied around the phrases, egging each other on to continue to hold or even buy more on the dips.

Without surveillance from a central authority, cryptocurrencies can be used for fraudulent activities, such as illegal transactions and money laundering. It is not only a popular term but is also considered an investment strategy. 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. I’LL TELL YOU WHY,” their message read (this time spelling “hold” correctly).

“Hodl” and Cryptocurrencies

We believe everyone should be able to make financial decisions with confidence. If you run into people telling you to “hodl,” there’s a good chance that you’ve encountered cryptocurrency enthusiasts. Be sure to use good judgment in making critical financial decisions, such as purchasing a cryptocurrency. “HODL” is a cryptocurrency-related slang that stands for the word “hold” misspelled.

The legendary volatility of cryptocurrency is due to the fact that it’s driven entirely by sentiment, since no hard assets or cash flow back cryptocurrencies (with the exception of stablecoins). Many crypto coins, maybe even most of the 20,000 or so in existence, may end up worthless. On Dec. 18, 2013, Bitcointalk user GameKyuubi uttered the phrase “I AM HODLING” as part of a rant against the difficulty and even futility of trading cryptocurrency. Digital currency is notoriously volatile, and those who try to time the price swings may find themselves buying high and selling low — gradually or quickly eating away at their capital.

You’re our first priority.Every time.

Despite high market volatility, many cryptocurrency owners believe in the long-term financial prospects of Bitcoin and other tokens. At the same time, many other people believe that buying cryptocurrency is equivalent to gambling. The biggest reason why “hodl” has become such a popular term is the general volatility of the prices of cryptocurrencies. Many cryptocurrency tokens, even relatively stable ones such as css gradients Bitcoin and Ethereum, frequently have very volatile market swings. The cost of these tokens can fall 100% one month and then rise 300% within the next few months.

1. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
2. We do not include the universe of companies or financial offers that may be available to you.
3. HODL is used in the crypto community to refer to a strategy of holding onto bitcoin holdings through its various price fluctuations and volatility.
4. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital.
5. HODL may not be the right approach for every crypto investor and every cryptocurrency.

However, Forbes Advisor Australia cannot guarantee the accuracy, completeness or timeliness of this website. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site.

Who Started the Term HODL?

The price of Bitcoin began another surge in mid-2017 and reached a historic high of $19,167 at year-end. However, the price fell again after the 2017 surge; it hiked again during the COVID-19 pandemic and hit a new high of over $58,000 in early 2021. The price surged from $15 in January of said year to over $1,100 at the beginning of December, which delivered a return of 7,230%. With a high-volatility nature, the price fell from $716 by 39% to $438 in mid-December. Get step-by-step guidance on how to invest in Tesla stock and learn the ins and outs of this electric vehicle company.

But “HODL”, as it has gained popularity among crypto enthusiasts, has come to mean “hold on for dear life”. Crypto HODLers, like buy-and-hold stock investors, pride themselves on “holding on” by not selling their cryptocurrency, no matter what happens in the crypto markets. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to best uk crypto exchange uk buy or sell particular stocks, securities or other investments. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor.

What Is HODLING?

“The people who are in the space very much have a belief about the transformative nature of java developer salary by countries 2017 infographic software development the technology itself,” Duong says. But bitcoin’s gains don’t come without years of “HODLing” through stomach-turning losses.

The same philosophy should work for high-quality cryptocurrencies as well. Even a long-term cryptocurrency investor would be well-served to articulate clear goals and to monitor the emerging space for systemic risks. Jason Porter, senior investment manager at Scottish Heritage SG, says the HODL strategy can be particularly useful for crypto investors during market weakness, such as 2022’s crypto winter.

1. There are also times when it may be prudent to sell, such as cashing out some gains when you’ve met your goals.
2. The devotion among HODLers comes from the culture surrounding Bitcoin and other cryptocurrencies, says David Duong, head of institutional research at the cryptocurrency exchange Coinbase.
3. It’s impossible to argue that long-term Bitcoin HODLers have not done well.
4. Bitcoin and most other cryptocurrencies are based on a technology called blockchain, which has many uses, including a way to safely and anonymously make payments over the internet.
5. The misspelled term “HODL” circulated quickly in the forum and spread to other cryptocurrencies.

How we make money

Before investing, review the company’s standing, looking at things like earnings and sales, vision and background of management, and the overall status of the industry. The exact origin of HODL is well established, and the context surrounding it offers a good lesson to cryptocurrency traders and those who would like to get started setting the environment variables in heroku complete python web course trading crypto. The term HODL emerged from a 2013 message board post on the Bitcointalk forum as an errant misspelling. HODL is one of those terms that’s shown up amid the rise of cryptocurrency. While it looks like an acronym — one of those terms like FBI or KFC that abbreviates a word into its initials — HODL is simply a misspelling of the word hold, albeit one that caught on for the silliness of its mistake.

It often refers to retaining crypto assets that you own for an extended period, even throughout a highly volatile market movement. “Hodl” is meant to encourage people to not impulsively sell when a cryptocurrency drops dramatically or rises to become highly profitable to sell. Bitcoin has only been around since 2009, giving it a limited long-term track record compared with stocks, bonds, property and other assets. Others have argued that the stubbornness and close-mindedness of HODL culture is “cult-like”, blinding the community to any legitimate criticisms of Bitcoin as an investment or a currency. In no time, the term HODL spread like wildfire throughout the crypto world. Today, it refers to investors who refuse to sell their crypto regardless of how high or low prices trade.

Since its debut in 2009, Bitcoin’s value has climbed from just pennies to more than $70,000 at one point. So, a long-term buy-and-hold approach would have returned traders many times their initial investment, because the strategy prevented them from selling when things got tough. With a relatively short history compared to other types of assets and fiat currencies, cryptocurrencies face a future with lots of unknowns.

Risks of “HODLING” Cryptocurrencies

Ben Gagnon, chief mining officer for Bitfarms, says HODL is more of a mentality than an investing strategy. The term almost immediately became a meme via social media, and the misspelling continues bitcoin and cryptocurrencies 2020 to live on in internet message forums such as the infamous Wall Street Bets board on Reddit. An introduction to cryptocurrencies and the blockchain technology behind them. Learn how to buy Reddit stock and what you should know before investing in the recent social media IPO.

The devotion among HODLers comes from the culture surrounding Bitcoin and other cryptocurrencies, says David Duong, head of institutional research at the cryptocurrency exchange Coinbase. You’re scrolling through social media, and you encounter someone saying that they’re “HODLING” or telling someone else to “HODL.” Confused? Here’s what the word means in the world of cryptocurrency what is cryptocurrency and finance—and why it’s not misspelled. Bitcoin’s extreme volatility has produced a handful of horrendous annual returns throughout the years.

Why Do They Say HODL Instead of Hold?

The volatility is more extreme, but the long-term gains have been quite appealing. Blind faith in a product or idea might seem like a poor quality for an investor — like somebody refusing to sell shares of Blockbuster when Netflix was first on the rise. But according to financial planners and analysts, it’s also a rational response to a market whose ups and downs are exceedingly difficult to predict. GameKyuubi explained in the post that he planned to “hold” his bitcoin (BTC) investments because he knew he was a bad trader.

Providing access to our stories should not be construed as investment advice or a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction by Forbes Advisor Australia. In comparing various financial products and services, we are unable to compare every provider in the market so our rankings do not constitute a comprehensive review of a particular sector. While we do go to great lengths to ensure our ranking criteria matches the concerns of consumers, we cannot guarantee that every relevant feature of a financial product will be reviewed.

Based on these principles, the best time to HODL is now, always, and forever. A true believer would always hold on to their tokens, even if markets crash or become extremely volatile. HODLing becomes an ideological belief about the long-term prospects of blockchain technology, cryptocurrencies, and the communities that have formed around them. The term originated from a 2013 online post to the Bitcointalk forum where the typo appeared. The price of Bitcoin in 2013 was volatile at the time, surging to over $950 at the beginning of December 2013, up from just over $130 in April of the same year. The poster encouraged people not to sell and that they were “hodling” sic.