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What is HODL? 10 Crypto Slang Terms Explained

Some investors choose to HODL after buying during price drops, while others continuously invest over time, a strategy known as dollar-cost averaging. The term HODL was born from a post titled ‘I AM HODLING,’ made by a member named GameKyuubi, on the famous Bitcoin forum Bitcointalk in December 2013. The author admitted to being a ‘bad trader’ and decided to hold onto his Bitcoin investment regardless of the bear market, thus becoming one of the earliest Bitcoin investors to promote this strategy. If you are actively trading you will need to be more skilled, with more time allocated to the markets. This increases how you can make money, as you can also profit when prices are falling. 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.

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. They must have sufficient capital capacity to avoid forced sales or meet unexpected liquidity needs. HODL is a term derived from a misspelling of “hold,” in the context of buying and holding Bitcoin and other cryptocurrencies. It’s also commonly come to stand for “hold on for dear life” among crypto investors. Yes, the principle of HODLing can also be applied to the stock market. It’s similar to the buy-and-hold strategies used by many stock market investors.

  1. So although the future price of some cryptocurrencies can astronomically rise, it is important to use other strategies, like the fundamentals of a project, when deciding to invest.
  2. 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.
  3. HODL ($HODL) is a cryptocurrency that was named based on the popularity of “HODL” as an expression in the crypto community.
  4. HODLing is a sound investment strategy that has been successfully applied even within the traditional markets.

It’s a healthy part of a sensible cryptocurrency investing strategy when combined with serious research into the quality and long-term prospects of your cryptocurrencies. Most of us will do better with a well-researched hodling portfolio than a short-sighted day trading approach. HODLing is a sound investment strategy that has been successfully applied even within the traditional markets. HODLing might not be the best strategy if the investor is looking for short-term gains. The term ‘HODL’ originated from a post in a Bitcoin forum, where the user accidentally typed ‘hodl’ instead of ‘hold’ during a discussion about trading strategies. The user referred to themselves as an ‘illusioned noob’ who was poor at trading, thus choosing to ‘hodl’ during a period of high price volatility.

Examples of cryptocurrencies include Bitcoin, Ethereum, Ripple, etc. Decentralization is the major feature and advantage of cryptocurrency, as it is not issued by a central authority such as a country’s central bank. The misspelled term “HODL” circulated quickly in the forum and spread to other cryptocurrencies. Cryptocurrency investors use the term to refer to buy-and-holding assets for a longer time horizon rather than making frequent trades.

The term “HODL” contrasts with “Paper Hands”, a term used to describe an investor who sells their investment at the first sign of financial turmoil in fear of potential losses. Used by investors, “HODL” refers to investors who do not sell their investments despite huge fluctuations in the market. As a strategy, there is a good case to say that investors who believe in the project of a cryptocurrency should by default be Hodlers. However, this should only come after truly understanding the opportunity and value that the crypto could bring, as Hodling will require a high-risk tolerance to be successful. Based on today’s value of $42,120.21 for one Bitcoin, Laszlo paid over $421 million for the transaction. This folklore has been the backbone Hodling strategy, where investors refuse to part with their crypto, regardless of the financial pains of keeping them, especially during a down market.

Buy-and-hold investors tend to hold their assets for an extended period of time to profit from the long-term value appreciation. In contrast, traders are much more active in transactions and seek returns by buying at low prices and selling at high prices. This strategy relies on the theory that, although there may be short-term volatility in the market, stocks will provide a good return over the long term. However, as with crypto investments, it’s recommended to have a diversified portfolio and make well-informed decisions based on research or financial advice.

But in general, the idea of investing for long-term, rather than short-term, gains is not a new one. The utility of HODLing, like any investment strategy, has its limits. Even a long-term cryptocurrency investor would be well-served to an easier way to buy crypto articulate clear goals and to monitor the emerging space for systemic risks. I’LL TELL YOU WHY,” their message read (this time spelling “hold” correctly). Based on these principles, the best time to HODL is now, always, and forever.

How to Buy Sundial Growers Stock Invest in SNDL

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. Hodlers often hold a long-term outlook on their investment and do not engage with the intraday market volatility.

Can you HODL in the stock market?

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. Overall, there are many ways to view it, be it a phrase, strategy, meme, or even a movement. Ultimately it appears that with long-term crypto enthusiasts, it is the promise of change that comes with time, and patience. So although the future price of some cryptocurrencies can astronomically rise, it is important to use other strategies, like the fundamentals of a project, when deciding to invest.

Hodl as a strategy

HODL may also refer to the HODL token on cryptocurrency exchange Binance’s Smart Chain. Users can earn rewards in Binance coin by depositing their tokens in a liquidity pool. 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 the top 5 most common ux mistakes web designers make safety to investors, as investors are not exposed to short-term volatility and can avoid the risk of buying high but selling low. “HODL” originated as a misspelling of “HOLD” (written in all caps), in an online post by an early Bitcoin investor. But “HODL”, as it has gained popularity among crypto enthusiasts, has come to mean “hold on for dear life”.

If you invested $1,000 in Bitcoin on the day of the original HODL post, it would be worth much more today. But there are countless people who have lost money trading Bitcoin in the meantime, buying it when it was high and bailing out after a disappointing fall. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.

In crypto, the term is used to refer to individuals or institutions with an outsized investment in a particular asset. The term is, however, used to describe huge losses, and even though ‘huge’ is considered a relative term, losing a lot of coins qualifies as being rekt. A good strategy, Morrison says, is to have a strong idea of why you’re investing in something when you buy it. And when you’re tempted to sell it, a key question is whether something about your analysis has changed. The devotion among HODLers comes from the culture surrounding Bitcoin and other cryptocurrencies, says David Duong, head of institutional research at the cryptocurrency exchange Coinbase. In a post on the Bitcointalk Forum in 2013 now famously wrote “I AM HODLING”.

Bag holder is a negative term used to describe anyone in possession of a significant amount of coins or tokens whose value has fallen to a level that it is unprofitable to sell. The strategy has proved right for the most part, as some of the larger assets have seen incremental value gains over a number of years. However, if an analyst could zoom into the monthly price action of most of these assets it would be evident that most experienced wild rides in short-term durations. For instance, if the asset is in the middle of a bear market, there will be fewer buyers than there are sellers.

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. 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.

Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation. Mooning is a related term to ‘When Lambo’ that also refers to stratospheric price rallies. If the price of an asset rises very fast, the community equates that rise to a ride on a rocket to the moon which gave rise to the phrase going to the moon or ‘mooning,’ for short. Trying to beat the market by timing reversals is an expert’s game, and most newcomers to crypto are not experienced at doing that. HODLing thus becomes a safe play for such individuals and institutions looking for long-term gains rather than gaming the system.

From being a drunken misspelling to a phrase used by the highest, most powerful cohort of the community, the Hodl meaning in crypto has become integral in the space. This has been particularly the case for maximalists who see Bitcoin, as well as the wider blockchain as being the heir apparent to current financial and economic infrastructure. The term originated from the Bitcointalk forum in 2013, and over a decade later remains relevant not only as a your ultimate guide to heroku custom domain name term but also as a strategy for investing in crypto. With a relatively short history compared to other types of assets and fiat currencies, cryptocurrencies face a future with lots of unknowns. Without surveillance from a central authority, cryptocurrencies can be used for fraudulent activities, such as illegal transactions and money laundering. It is important to know when the right time is because this metric varies from one individual to another.

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