Other long-term BTC holders who resisted sell-offs started describing themselves as “HODLers,” and HODL culture was born. While it’s used by some people as an acronym for Hold On (For) Dear Life, it actually just means hold – don’t buy more for now, but don’t sell what you have. Generally, the term is only really used in the crypto world, where prices are super flaky and can drastically change at any point.

• The term HODL emerged from a 2013 message board post on the Bitcointalk forum as an errant misspelling.
• HODLers typically focus on the long-term prospects of digital assets and don’t chase immediate profit.
• Despite the recent high rate of return and the reasons to invest, as mentioned above, prudent investors should also reckon with the risks of holding cryptocurrencies.
• Although T-bills are considered safer than many other financial instruments, you could lose all or a part of your investment.
• Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable.

In a perfect world, you’ll never invest in any of these cash-burning crypto projects. In reality, you’re better off selling some cryptos before they burn too much of your money. Many newer investors will start out HODLing by using a dollar cost-average strategy. This means that you buy a set amount every day, week, or month, which allows you to buy in at the average price throughout your investment period.

Tips for Becoming a Successful HODLer

So you buy, you hold on for dear life — hodl — and you build wealth in the long haul. Some enthusiasts have even accepted HODL as an acronym, meaning to “hold on for dear life.” The term is also related to “diamond hands,” which means that you have an unbreakable grip on the crypto you own. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Keep in mind that other fees such as regulatory fees, Premium subscription fees, commissions on trades during extended trading hours, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Open to the Public Investing’s Fee Schedule to learn more. When you buy and hold, you don’t have to worry about market volatility, or watch for every movement in the market to time your sales.

• Investors who use DCA regularly buy small amounts of their preferred crypto assets over a long period.
• In this guide, we will explain what is ‘HODL,’ which is one of the most prominent terms used by cryptocurrency investors.
• The HODL memes bring levity to stressful situations, and the phrase inspires fellow investors to stay strong when markets decline.

Digital currency bitcoin has seen a tumultuous ride in recent weeks, as the price fell to trade below $6,000 per coin in June, down from a high of over $19,000 last year. And, everyone from Warren Buffett to athletes and celebrities have weighed in on the future of cryptocurrencies. HODL is one of those terms that’s shown up amid the rise of cryptocurrency.

HODL or…?

To learn more about digital assets and trading strategies, check out our academy. The boldness of GameKyuubi’s post struck a chord with other Bitcoin investors. Shortly after “I AM HODLING” went live, crypto fans began sharing it on social media. Soon, HODL memes flooded the online community—but beneath the humor was an on-point investment strategy.

• Crypto traders began to encourage each other to HODL, or hold, their investments even when the market was volatile.
• Bitcoin investors were taking to forums like Bitcointalk to share their fears and encourage each other to stay the course.
• This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research.

HODLing becomes an ideological belief about the long-term prospects of blockchain technology, cryptocurrencies, and the communities that have formed around them. The term ‘HODL’ was first used by a BitcoinTalk forum member going by the pseudonym GameKyuubi on December 18th, 2013. 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.

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Cointree is the best crypto exchange in Australia and is trusted by tens of thousands of investors. All you need to do is create and verify your account, deposit funds, and you’re ready to make your first purchase. Moreover, many investors believe that it’s still early days for crypto and there are still incredible gains to be made.

Our partners cannot pay us to guarantee favorable reviews of their products or services. However, since they have outsized positions, they need to sell while everyone is buying, so they keep shilling the asset as they offload their positions and once they stop https://hexn.io/ pushing it. Typically, the price of the asset comes crashing down as the latter buyers look to exit their positions. To shill is another common term within the social media circles of crypto enthusiasts which means to selfishly promote a coin or token.

HODL Meaning: Hold On for Dear Life

Blind faith in a product or idea might seem like a poor quality for an investor — like somebody refusing to sell shares of Blockbuster when Netflix was first on the rise. But according to financial planners and analysts, it’s also a rational response to a market whose ups and downs are exceedingly difficult to predict. HODL was later retrofitted to be an acronym (backronym) for “Hold On for Dear Life” and refers to not selling, even during strong market volatility and poor market performance.

• For more information on risks and conflicts of interest, see these disclosures.
• “HODL,” one of the most frequently used terms in the cryptocurrency world, originated years ago from a typo.
• Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives.
• In online forums devoted to cryptocurrency, users can be shunned for liquidating part of their holdings even after significant long-term gains.
• However, by summer 2020 a bull market began and Bitcoin saw its price go from $10,000 in June to $60,000 by April 2021.

Users can earn rewards in Binance coin by depositing their tokens in a liquidity pool. It is worth noting that there could be some differences between a HODL strategy and the traditional buy-and-hold investing strategy. When people adopt a buy-and-hold approach with stock investing, they often put their money into index funds in the hope of not beating the market but matching it. But long-term cryptocurrency investors, on the other hand, tend to hope for more substantial gains. Not only has “hodling” turned into one of the most popular cryptocurrency terms, it’s also served as a strategy for traders, albeit a basic one, given the volatile nature of the crypto market. This refers to a buy-and-hold situation where hodlers stay invested and refrain from trading when the asset price decreases.

What does HODL mean?

Neo from The Matrix asks Morpheus, “What are you trying to tell me, that I can trade my Bitcoin for millions someday?” Morpheus responds, “No Neo, I’m trying to tell you that when you’re ready … you won’t have to.” If you have ever spoken to anyone in crypto, the term HODL will probably sound familiar to you. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

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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. In addition to hacks and glitches, you could lose your crypto if a blockchain’s validator misbehaves (an occurrence known as “slashing”). Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Tokens based on a blockchain, NFTs are used to guarantee ownership of an asset. We’ll take you through three top tips to keeping your crypto secure and impervious to hacking.

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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. Stock market investors often use the buy-and-hold approach for long-term investments, which is effectively the same as HODLing. When you HODL, you give up the chance to invest that money in a diversified portfolio of stocks, bonds, exchange traded funds (ETFs), and mutual funds.

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As a result, hodlers are theoretically safe from some trading tendencies, be it buying at a high price or selling at a low price (the latter is also known as “SODL” – a less commonly used term derived from “HODL”). HODL is an investing strategy in which individuals purchase cryptocurrencies and hold them for a long period of time. This allows investors to take advantage of an increase in the value of the asset. Someone adopting a HODL strategy isn’t trying to time the market, and they aren’t going to sell their investments when they think the market might dip. Brokerage services for alternative assets available on Public are offered by Dalmore Group, LLC (“Dalmore”), member of FINRA & SIPC. “Alternative assets,” as the term is used at Public, are equity securities that have been issued pursuant to Regulation A of the Securities Act of 1933 (as amended) (“Regulation A”).

Crypto hodl vs. trading

Much like the term itself, HODL encourages users to hold onto their tokens for rewards in the Binance coin (BNB) that are distributed every three days. The rewards are generated from taxes collected on transactions made by users, such as sale, purchase, or transfer of HODL tokens. The tax amount is converted into BNB tokens and a percentage of the gains is redistributed back to users from the collective liquidity pool. The prices of Bitcoin and other cryptocurrencies are notoriously volatile, but HODLers disregard even large price swings. Since then, HODL is being described as an acronym for “hold on for dear life” more and more.

Can you HODL Bitcoin?

“HODL,” one of the most frequently used terms in the cryptocurrency world, originated years ago from a typo. The term “HODL” is crypto-industry slang for the practice of holding tokens for the long term. In other words, market timing is difficult and risky, and making the wrong moves will lock in paper losses that may otherwise disappear over time.

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Public’s social investing platform gives you access to a knowledgable and diverse community of fellow investors. By sharing insights and updates on market activity with each other, Public’s users can stay on top of the market and build confidence in their investing strategies. While the SPEDN strategy involves buying real-world goods with cryptocurrencies, BUIDL traders use their crypto to build blockchain applications. The idea behind this strategy is to encourage users to contribute to the development of cryptocurrency infrastructure, which will ideally may raise the value of digital currencies. Saving is all well and good, but can you imagine being able to save and at the same time earn a profit for it? Today we are going to talk about what hodl is and what are the advantages that this strategy can bring.

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Traders who use the SPEDN strategy believe in spending cryptocurrency in order to encourage real-world adoption. This approach believes that popularizing digital currencies can help raise their value. HODLing requires a long time horizon, so it’s usually best for investors that don’t need access to their cash for a long time. If you’re looking to cash out quickly, HODLing may not be the right approach for you. What he’s suggesting is, that unless you’re a great trader, the HODL investment strategy can be a good option in crypto. Cryptocurrency has been the best performing asset class of the past decade.

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If you have a positive outlook on blockchain technology and aren’t afraid of market volatility, HODLing crypto may be worth considering. However, those more interested in taking an active approach to portfolio management should focus on daily trading over HODL. Hodling sounds a lot like the long-term buy-and-hold strategy The Motley Fool employs in the stock market. Generally speaking, we recommend owning stocks for at least five years. The wealth-building benefits of compound returns make a bigger difference in a longer time frame. The same philosophy should work for high-quality cryptocurrencies as well.