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.
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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.
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- HODL is used in the crypto community to refer to a strategy of holding onto bitcoin holdings through its various price fluctuations and volatility.
- 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.
- HODL may not be the right approach for every crypto investor and every cryptocurrency.
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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.