Hodl is an acronym for Hold on for dear life. It is a term for long-term investing behavior. That is, which investors buy crypto coins? And have faith in that coin and then use a long-hold investment strategy, not selling, even during a bear market or no matter how much the price drops. We will call their behavior that they are Hodl coins.
Origin of the word Hodl
The term Hodl in the crypto space actually comes from the word “Hold,” which means “to hold.” It originated in 2013 when a user asked a question on a Bitcoin Talk forum and asked: The title of the thread was wrong as “I AM HODLING” and within an hour the word Hodl was quickly spreading as a meme online.
Who is Hodler?
As mentioned above, hodl is a term used to refer to the behavior of a person holding a long coin without selling it under any circumstances, while hodler is a term referring to the “person” who owns a crypto coin. If you come across the term Bitcoin Hodler, it means a person holding a long bitcoin coin.
What is Crypto Hodl?
Crypto hodl is the holding of crypto coins that an investor likes or has faith in for an extended period of time without being limited to a single coin. In which an investor may choose several crypto coins Hodl at the same time, Hodl is also a strategy that can be applied during a downtrend suitable for newbies who are sensitive to cryptocurrency price fluctuations.
Is it really a good idea for HODL crypto?
If the reader has been in the crypto industry for a while will start tattooing and begin to see the word HODL through some eyes and if anyone does not know the word HODL comes from the English word Hold which means holding. Which has now become slang or a meme but the meaning remains the same: to continue to hold crypto coins, not to sell them, even though the term is viewed as a joke. But it is also considered as one of the profitable strategies in the crypto industry as well. There are many investors making HODL trending because they believe that it will make them multiply their profits in the end. But is HODL a good investment strategy?
First of all to know if the strategy is good or not and here must be a comparison before that. What other strategies can we choose for trading crypto so which here will be divided according to the investment style between
Keep buying and selling
Due to the highly volatile nature of the cryptocurrency investment market, The price of each coin can go up or down a lot at any time, every second, making this type of investment a huge profit for traders for a short time, within a few days or weeks only.
The advantage of this strategy is that we have the ability and power to cut-loss (disciplined sales decisions). When the price reaches the set threshold because they want to keep their capital), they can survive and be able to play in the crypto market in the future if there is a new signal or opportunity. and if playing correctly according to the system and discipline can make a profit faster and can manage risks more than HODL, for example During March, the price of Bitcoin dropped from $11,000 to $8,500 in just a few weeks you can check the graph from internet. If we aim to cut loss at $10,000 and gradually buyback to $8,500, we will have a 17 percent increase in Bitcoin, just with discipline.
In addition, investors with this strategy have more liquidity in their portfolios as they are always ready to sell and withdraw money.
But at the same time, its disadvantage is Traders using this strategy need time to sit and watch the charts, follow the news. and analyze the graph all the time For example, if using this strategy and want to make quick profits with coins that are not sure if they have a good foundation or not. During times when the coin’s price is so high, investors may not be able to sell them in time, causing them to be stuck in the mountains because there is a sell-off (make a purchase then the market price falls below the buy) and cut-loss is necessary, and multiple rounds can lead to a total loss. For example, LUN has just been listed on internet in the last few days where its price went up sharply in a short time and fell sharply in a short time as well.
Buy and hold long
Its advantage is we hardly have to waste time sitting and staring at a screen or cell phone. We just allocate our capital. Then gradually buy at a price that we can accept and appropriate, then sit and watch the value of our portfolio grows Based on the value of coins as of May 15, 2017, and 2018 on Coinmarketcap, if we HODL 6 cryptocurrencies over 1 year from the top 10 for 1 year.
Every coin has at least doubled in value compared to normal investment this is a huge return, and this does not include the current market conditions that are in the downtrend, in fact, a year ago the coin hit its highest price during the period. That’s all, and the remaining 4 coins in the Top 10 are those that are less than a year old, but all have increased in value many times over that period.
And of course, its disadvantage is if we have no knowledge of Understanding the Fundamentals of the Coins We Hold Then came to decide HODL coins that are fundamentally bad. We may not receive a return because the coin was not developed. And without creating any additional value for the crypto, Blockchain, or other industries at all.