The term “HODL” means “hold on for dear life” and is popular among crypto investors. HODL may look like a funny misspelling of the word “hold” – and some even say it’s a reference to the buy-and-hold investment strategy – but it’s actually based on traditional buy-and-hold principles.
To those new to cryptocurrency investing, HODL is one of many terms used in forums and articles. Crypto slang: Words like FUD, Moon, Sats, and HODL that originated as chatroom terminology are now commonly used cryptocurrency terms that investors should know. As HODL gains traction in other market sectors, you’ll hear other investors use it as well.
The following is a look at how this term has become one of the most popular bits of jargon in the cryptocurrency industry – and how it could also help your investing strategy.
The meaning of HODL
What does the phrase “hold on for dear life” stand for, and how does it relate to the deeper meaning of HODL? A more familiar investing term – buy and hold – can help many investors gain a better understanding of HODL.
For example, if you’re wondering whether to “hold stock,” then you’re talking about buy-and-hold strategies. A buy-and-hold investor purchases stocks and other securities with the intention of holding them for the long term, regardless of market fluctuations.
Investing is meant to weather market ups and downs with an eye toward long-term gains, as history has shown that the stock market tends to rise over time. For another way of putting it: if there are bumps in the market, you want to hodl stock, not sell it. Valuation investors often take this approach.
When it comes to cryptocurrencies, what does hodl stand for? It can be one of two things.
First, the basic meaning of hodl can be applied to buy-and-hold strategies when referring to bitcoin or other cryptocurrencies. In other words, a lot of cryptocurrency holders should hold on to their cryptocurrencies rather than selling them off in a panic if volatility increases.
The second hodl meaning can refer to a specific type of cryptocurrency token called — what else? — HODL. HODL also referred to as Hodl, is a community-driven token that operates on the Binance Smart Chain.
The Beginning of Hodl
The term HODL originated as a misspelling of the words “hold.” Ultimately the acronym “hold on for dear life” was attached to the term.
Below’s what happened. On the fateful day of December 18, 2013, a trader with the username GameKyuubi (who later on admitted to having had a bourbon or more), published on a Bitcointalk forum:
” I AM HODLING,” he started his memorable, inebriated tirade.
In the 24 hr before his message, the price of Bitcoin had fallen 39%, from $716 to $438. This desired a year-long bull run in which Bitcoin rose from $15 in January 2013 to a high of over $1,100 in December 2013.
In spite of the turmoil, GameKyuubi had actually composed his mind to stop trying to time the marketplaces, and also to merely hold his Bitcoin from that factor on.
” WHY AM I HOLDING? I’LL TELL YOU WHY,” the tirade proceeded.
” It’s due to the fact that I’m a bad investor and also I KNOW I’M A BAD INVESTOR. Yes, excellent traders can identify the highs as well as the lows … Easily and make a million bucks certain no worry bro.”
Despite the confusing punctuations, GameKyuubi was voicing a usual aggravation amongst investors with just how to handle rate variations. Yet GameKyuubi safeguarded his hodl strategy.
” You just sell in a bear market if you are a good day trader or an illusioned noob. The people in between hold. In a zero-sum game such as this, investors can only take your money if you offer.”
The cryptoverse went wild. HODL came to be a net meme within the hr, and its usage as a genuine investing term spread from there.
So, the TL: DR version of the hodl definition? It came about as the outcome of a typo.
Hodl & Cryptocurrencies
As stated, hodl can imply a couple of things when reviewing cryptocurrencies. Capitalists might be speaking about a particular HODL technique they’re utilizing to gauge when to buy or market crypto. Or they may be referring to the HODL token itself.
At the core of the hodl method is the suggestion that crypto financiers shouldn’t be trading based only on temporary rates moves. Rather, cryptocurrency capitalists need to hold on to their coins or symbols, coming through durations of volatility as they reoccur. Even though cryptocurrencies might dip, pricing still has the potential to rebound, offsetting losses gradually.
This is what happened with the June 2021 crypto market crash. Many Bitcoin investors saw all of their 2021 gains erased after the cryptocurrency’s cost dropped considerably. Other cryptocurrencies, including Ethereum and Dogecoin, additionally charted large losses. But the down market was confirmed to be momentary, as lots of crypto prices have inched back toward their pre-crash levels.
Crypto financiers that squandered in the midst of the collision might have netted substantial losses. Yet those that chose to HODL rather might be at some point rewarded rather with much higher prices steps as the cryptocurrency market rebounds.
