What Does HODL Mean In Crypto? dYdX Academy

You can also participate in staking rewards with many cryptos, allowing you to generate income while you continue to hold the digital asset and potentially ride it to new heights. However, it’s worth noting that being named ‘HODL’ doesn’t necessarily make it a valuable or safe investment. Like with any other cryptocurrency, the decision to buy and hold HODL tokens should come after careful research. Yes, there is a cryptocurrency called HODL (Hodl Hodl) with an eponymous ticker (HODL). At its core lies the idea of rewarding holders for not selling their tokens, thus providing an incentive for the ‘HODL’ strategy. It’s a fun nod to the term and its origins in the crypto ecosystem.

• Cryptocurrency is still relatively new and isn’t subject to the same regulation as traditional investing.
• Cryptocurrency has been the best performing asset class of the past decade.
• Open to Public Investing is a wholly-owned subsidiary of Public Holdings, Inc. (“Public Holdings”).
• Investors may have to experience extreme ups and downs of their asset values, which means they should have much larger risk appetites than investors of conventional investment instruments.
• Premium users get access to guidance from expert analysts, as well as data from Morningstar’s industry-leading reports.
• The HODL token operates using the Binance Smart Chain, and HODL token owners can earn Binance Coin rewards.

The HODL strategy has since its origin been used as a community anthem used whenever the price of a digital asset has been rallying. The idea is to discourage selling at the top, which could possibly trigger a reversal of the asset’s price. Some say you should HODL until your coin is worth a sum that you’re happy with and then sell and take the profits. However, there’s always a chance that prices may continue to rise after you’ve sold and you may end up regretting your decision to not wait longer.

“HODL,” one of the most frequently used terms in the cryptocurrency world, originated years ago from a typo.

There are HODL memes, HODL forums, and even HODL T-shirts, but the term is more than a punchline. In fact, it’s synonymous with a popular—and powerful—passive investment approach. Oftentimes, other investors will suggest HODLing as a solution to FUD. If you’re looking for ways to shape your investing strategy, Public Premium features can help.

• Public’s social investing platform gives you access to a knowledgable and diverse community of fellow investors.
• There are HODL memes, HODL forums, and even HODL T-shirts, but the term is more than a punchline.
• The original crypto plunged to $4,000 before ending the year around $29,000.
• They must have sufficient capital capacity to avoid forced sales or meet unexpected liquidity needs.
• HODLing might not be the best strategy if the investor is looking for short-term gains.

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. Bankrate follows a strict
editorial policy, so you can trust that our content is honest and accurate. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. At Bankrate we strive to help you make smarter financial decisions.

Motley Fool Investing Philosophy

Therefore, traders interested in crypto need to carefully understand what they’re investing in with crypto. 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 10,000 or so in existence, may end up worthless. It’s worth noting that ‘market timing’ — the act of trying to predict future price movements — is notoriously difficult and risky, even for seasoned investors. Satoshi Nakamoto, the creator of Bitcoin, designed it as a medium of exchange and a store of value, suggesting a long-term use case. Therefore, many investors view any time as a good time to HODL as long as it aligns with their personal investment strategies and risk tolerance.

• The misspelled “HODL” quickly circulated among the crypto community, and soon after turned into an internet slang to indicate when a person holds bitcoin rather than selling it.
• GameKyuubi wrote a post to the forum titled “I AM HODLING” and proceeded to pen a semi-intelligible post attempting to explain his new investment strategy while (admittedly) intoxicated.
• It’s a fun nod to the term and its origins in the crypto ecosystem.
• However, the difference between long-term value investing and long-term HODLing is the difficulty in accurately valuing cryptocurrencies.
• HODL helps connect people in the Web3 ecosystem and encourages the crypto community to focus on the positive aspects of blockchain technology.

With cryptocurrency, Morrison says, the importance of patience is even higher. The volatility is more extreme, but the long-term gains have been quite appealing. A marketplace for cryptocurrencies where users can buy and sell coins.

Definition and Examples of HODL

If you simply bought bitcoin ten years ago and held it until today, you would have made incredible returns. So the reason people HODL crypto is simple; it seems to pay to be a hodler. Back in 2013, someone with the username GameKyuubi made a post on the BitcoinTalk forum. After a few whiskeys, they misspelled “I AM HOLDING” and wrote “I AM HODLING” instead. Other users found his spelling mistake hilarious and they became ‘hodlers’ too.

• But these phrases have extended beyond crypto to other assets, such as stocks.
• And if you’re a HODLer, capital gains aren’t the only way you can make money on cryptocurrency.
• The misspelled term “HODL” circulated quickly in the forum and spread to other cryptocurrencies.
• Although buy-and-hold may be an effective approach when it comes to investing in stocks, we still don’t know if it works for digital assets.
• After a few whiskeys, they misspelled “I AM HOLDING” and wrote “I AM HODLING” instead.

Due to their highly volatile nature, cryptocurrencies provide great opportunities for traders to build up long and short positions frequently. However, “hodling” can provide more safety to investors, as investors are not exposed to short-term volatility and can avoid the risk of buying high but selling low. This typo quickly caught on within the forum and then spread across the wider crypto community. Since then, it has been adopted by crypto traders and investors as an acronym for ‘Hold On for Dear Life,’ representing a steadfast approach to holding cryptocurrencies amidst market fluctuations. If you’re curious about making HODL a part of your portfolio, we can help you get started. DYdX’s exchange offers dozens of advanced trading features for crypto traders, including fee-free perpetuals.

Is HODL Worth It for Individual Investors?

The misspelling set off a frenzy in the online world of crypto investors and the term quickly became a meme. Crypto traders began to encourage each other to HODL, or hold, their investments even when the market was volatile. 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.

Luckily, many believe that Bitcoin is still in its infancy and you may still be early if you start investing now. In that case, buying and holding means you’ll ride it all the way to a complete loss. Regardless of what you buy, you’ll need to analyze whether it makes sense to use a buy-and-hold strategy.

What does HODL mean in Crypto?

The utility of HODLing, like any investment strategy, has its limits. Even a long-term cryptocurrency investor would be well-served to articulate clear goals and to monitor the emerging space for systemic risks. 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 buy or sell particular stocks, securities or other investments. There is no difference between HODLing a cryptocurrency and a buy-and-hold strategy. You can HODL a stock through its volatility because you believe in the company’s future success.

HODL or…?

Before taking action based on any such information, we encourage you to consult with the appropriate professionals. Market and economic views are subject to change without notice and may be untimely when presented here. Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable. Historical or hypothetical performance results are presented for illustrative purposes only. Some crypto traders choose to use other approaches, like SPEDN or BUIDL. While the misspelled terms are send-offs of HODL, these strategies are completely different in their approach.

HODL vs. Buy-and-Hold Investing

They’re holding for the long-term and looking to build life-changing wealth. You only sell in a bear market if you are a good day trader or an illusioned noob. In a zero-sum game such as this, traders can only take your money if you sell. Bitcoin has only been around since 2009, giving it a limited long-term track record compared with stocks, bonds, real estate https://hexn.io/ 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. 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 history of HODL

Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Cryptocurrencies continue to gain more attention as an investment opportunity due to the remarkable breakouts in 2017 and 2020. The trend of financial decentralization and currency digitalization provides room for growth to cryptocurrencies.

As the project rises in popularity and utility, the value of the project’s token also rises. Continue reading to learn more about how it came to be, why it is considered an investment strategy, and other words that you may want to be acquainted with if you wish to be a part of the community. The first step for a beginner in the blockchain ecosystem is to find out where all the important conversations happen, including social media platforms and chat forums. Next, you should learn the terminology, and part of that is identifying the unique terms and phrases used by members of the community, what they mean and how to use them effectively. If a “whale” sells a lot of their stake, it can cause the price of a cryptocurrency to dip by flooding supply, he explains.

While it’s still unclear if HODLing will pay off for crypto investments, it’s historically been a go to approach for stock traders who want to invest in a bear market. The goal of HODLing is to wait out recessions and other dips in the market, with the goal of cashing out when the market improves. Many long-term HODLers take the examples of successful gains as a validation of a strategy that at times can border on zealotry. In online forums devoted to cryptocurrency, users can be shunned for liquidating part of their holdings even after significant long-term gains. HODL is a term derived from a misspelling of “hold,” in the context of buying and holding Bitcoin and other cryptocurrencies.

HODLING as a Strategy and Guiding Philosophy

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. 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 trading crypto. Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first.

Trading vs. HODL: Who Makes The Biggest Profit?

It is a rallying cry by the blockchain community encouraging the weak hands to hold on to their positions whenever the price rises to stratospheric heights or starts plummeting down to earth. Lamborghini supercars have, for a long time, been used as status symbols by wealthy crypto investors, especially those that can attribute a bulk of their wealth to blockchain-related activities. For instance, if the asset is in the middle of a bear market, there will be fewer buyers than there are sellers. For big investors, a falling market might not offer the right conditions to sell. They have to wait for buyers to come in to absorb their large orders.

How hodl works

Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The fall was possibly a result of a ban of third-party payment companies from working with Bitcoin exchanges from China’s central bank (People’s Bank of China). The author loaded the post with typos and upper cases to express his firmness in his simple holding strategy. This Article does not offer the purchase or sale of any financial instruments or related services.