The original crypto plunged to $4,000 before ending the year around $29,000. Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI’s full course catalog and accredited Certification Programs. Access and download collection of free Templates to help power your productivity and performance.

To the extent any recommendations or statements of opinion or fact made in a story may constitute financial advice, they constitute general information and not personal financial advice in any form. As such, any recommendations or statements do not take into account the financial circumstances, investment objectives, tax best ecn brokers in 2023 fee comparison included implications, or any specific requirements of readers. When covering investment and personal finance stories, we aim to inform our readers rather than recommend specific financial product or asset classes. 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.

Why “HODL” Cryptocurrencies

The HODL approach has been rewarding for long-term investors in Bitcoin, Ethereum how to buy flow crypto in usa (ETH) and other leading cryptocurrencies, as it’s helped them navigate extreme fluctuations in the crypto market. Buy-and-hold investing occurs when individuals purchase an asset—often stock—and hold it for a period of many years. Rather than trying to time the market, this strategy simply operates under the assumption that the asset’s price will increase over time. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. Hodling sounds a lot like the long-term buy-and-hold strategy The Motley Fool employs in the stock market. The wealth-building benefits of compound returns make a bigger difference in a longer time frame.

Hodling crypto only works with long-lived digital currencies how to buy bitcoin in the uk in 2021 that can build value over time. When you hodl one of the short-lived cryptos, that promised trip “to the moon” turns into a deep-sea dive with no return ticket instead. In a perfect world, you’ll never invest in any of these cash-burning crypto projects.

Who Started the Term HODL?

For those who invest in cryptocurrency, HODL has become a banner proclaiming their long-term allegiance to digital currency. These terms stand in contrast to “paper hands,” those who are willing to sell when volatility ratchets higher. The value of a single Bitcoin has gone from under a dollar when it first came out more than a decade ago to five-digit figures in recent years.

HODL: The Cryptocurrency Strategy of “Hold on for Dear Life” Explained

1. The wealth-building benefits of compound returns make a bigger difference in a longer time frame.
2. If even one whale decides to sell a particular token, they could tank the price entirely.
3. Many crypto coins, maybe even most of the 20,000 or so in existence, may end up worthless.
4. This is related to the view that an investor should not be swayed by short-term market movements and look to the long-term view.
5. The prices of Bitcoin and other cryptocurrencies are notoriously volatile, but HODLers disregard even large price swings.

News & World Report and a regular contributor for Forbes Advisor and USA Today. Still, if Bitcoin bulls are correct and BTC eventually becomes the world’s universal digital currency and preferred long-term store of value, long-term HODL’ers will benefit. The investor sentiment cycle is a visual representation of the emotions a typical investor experiences based on the performance of the investor’s portfolio over time.

The information provided by Forbes Advisor is general in nature and for educational purposes only. Any information provided does not consider the personal financial circumstances of readers, such as individual objectives, financial situation or needs. Forbes Advisor does not provide financial product advice and the information we provide is not intended to replace or be relied upon as independent financial advice. Your financial situation is unique and the products and services we review may not be right for your circumstances.

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. HODL, or “Hold On for Dear Life,” is now a widely known concept in the crypto community that refers to the strategy of not selling your digital assets, even amid extreme price changes in the market. And given Bitcoin’s latest bout of volatility, HODL remains relevant a decade later in 2023. Nest Services Limited, trading as Binance, is the entity ultimately responsible for the Binance Services offered through the Platform.Trading cryptocurrencies involves significant risk and can result in the loss of your capital. You should not invest more than you can afford to lose and you should ensure that you fully understand the risks involved.

The word “hold” has been used in finance for a very long time as part of the buy-and-hold strategy. This investing method involves buying a financial asset and holding it for an indefinite period of time. This is related to the view that an investor should not be swayed by short-term market movements and look to the long-term view. Today, Bitcoin prices are also down 59% in 2022 as rising interest rates have triggered a sell-off in cryptocurrencies and other risk-on assets. But investors who were spooked into selling their BTC in past downturns have lived to regret those decisions. Other forum participants embraced the misspelling, and it soon became the subject of memes.