Just hodl it!
If you have ever heard this phrase or uttered it yourself, it is probably because the value of your currency has taken a downturn. Staying in the game without selling, in the hope that things will change one day, justifies the rallying cry Just hodl it!.
Why? Because that phrase that was born as a spelling mistake ended up becoming one of the most popular slogans in the world of cryptocurrencies. In this post, we not only explain its origin, but also the reasons why it is worth waiting when investing in cryptocurrencies, whatever the situation.
If you want to know what this strategy is and what investors mean by it, read on.
It is not uncommon for any cryptocurrency investor who sees a dip in the value of their asset to utter the word 'HODL' to stay afloat despite the ups and downs. That is precisely what this strategy is all about, keeping the coin portfolio unsold over time.
It is a kind of subhuman resilience applied to the crypto world. This explains why many investors maintain ownership of their assets despite falls and fluctuations in the financial markets. The opposite is true of traders, who mobilize their assets according to their value for short-term gains.
The question now is, where does this expression originate from? #CFBC7C
Not everyone can withstand the stress and uncertainty that virtual currencies unleash, both when they rise and fall. In one such Bitcoin fluctuation, something unprecedented happened.
We go back to 2013. Bitcoin had started the year at $13.40, but was hit in April, soaring to $220 and falling to $70 by the end of the month. In December there was a surge to $1,156.10 that would end up plummeting a few days later to $760.
User GameKyuubi started a message thread on the Bitcointalk forum with the expression 'I am hodling'. His aim was to communicate that he would hold on to his cryptocurrencies and not sell them even though the price continued to fall. Shortly afterwards, he acknowledged his typo by writing HODL instead of HOLD. Almost instantly, all sorts of memes began to emerge.
But why has this user decided to keep his assets, and is it worth waiting despite the price drop? Read on, we'll tell you.
In the world of cryptocurrencies, there are two types of people: those who take advantage of market volatility to make a profit, known as traders; and those who seek to invest their funds in virtual currencies and hold them over time, known as hodlers.
Whatever your investment philosophy, here are the reasons why holding on despite market fluctuations and falls is a good option. Or in other words, why HODL:
That anecdote eventually evolved into a cryptocurrency investment philosophy based on buying and collecting coins in order not to spend them. The goal is to wait in the hope that their value will increase and watch the initial investment appreciate in value. It's as easy as that.
There is no such thing as chance. At least in a world as changeable and unpredictable as that of cryptocurrencies. It is no coincidence that this user decided to hold on to his assets despite the fact that anyone else would have sensed that the best option was to sell before losing everything.
Why would he sell if he was not a good trader and did not know how to identify peaks and troughs in value in order to buy or sell at the right moment?
Like him, many users decide to maintain their cryptocurrency portfolio over time, something that many experts consider one of the best options to increase profitability in the long term.
For this reason, we have rescued the main characteristics of HODL, so pay close attention!
Although the purpose of all investment strategies is the same (to generate profits), each has its own characteristics and implications.
First at all, it was Bitcoin, but today there are thousands of different cryptocurrencies. Despite the profits that investment strategies such as HODL can generate, investing in cryptocurrencies is something that should not be taken lightly, but rather it is important to analyse the mission of the project and its durability. Otherwise, we are not making an investment, but a gamble.
GameKyuubi is one of the big names in the cryptocurrency sector, but he is not the only one. Others such as Satoshi Nakamoto and the Winklevoss brothers have also played a key role in the history of HODL. More than a strategy, it is an investment philosophy with its own name. Because it is so easy to buy cryptocurrencies and store them, any user can implement it.
Today we have learned about its history and meaning, but now it is time to answer all your questions or get more information.
Whatever your goal, Cresio can help you.