What does HODL mean?
The term Hodl represents an investment (or rather, non-investment) strategy in the field of cryptocurrency. So a Hodler is the one who habitually applies this strategy. Before explaining what it consists of, let’s start from the beginning.
The origin of the term HODL
The word HODL was first used on bitcointalk, a Bitcoin discussion forum in 2013.
As a reaction to the news of a bitcoin crash, a user named GameKyuubi created a thread called “I AM HODLING” followed by a rant about not being a good trader and that he would not sell out of doubt. He later said he misspelt “holding” because he was under the effect of a bit of whiskey.
The random typo, however, became viral in the crypto community thanks to memes and quotes of all kinds, which even made HODL an acronym that allegedly stands for “Hold On for Dear Life“.
The spirit of the Hodler
When “Hodl” was first used, the price of Bitcoin had dropped.
A dramatic drop like this leads amateur investors to see their losses increase, driving them to panic.
However, investors who believe in the future and potential of the blockchain and cryptocurrency do not get carried away by the situation.
In fact, even after an economic recession, prices tend to rise back if investors have faith.
Although future performance is never fully guaranteed and cryptocurrency is historically young, the market tends to repeat itself over time.
This means that any emergency or panic will pass and any downward trend will be reversed. The Hodler, therefore, doesn’t behave like those who sell everything, driven by the fear that the price will never rise again, but holds tight its funds with the confidence that sooner or later the price will rise again and one day maybe it will reach the decisive peak. Only then will he/she perhaps sell.
It is also true, however, that since this is a long-term investment, the Hodlers expect to earn money after a long time.
A Hodler’s word
It should be remembered that the Hodling approach has always been used in traditional markets as well. Although the term dates back to recent times, it has actually been used for financial investments for a long time.
Hodling is a good strategy if you are patient and willing to plan for the long term. Basically, there is no definite time to choose to hodl, however, you should always diversify your investments so that you can afford not to follow every little movement of the market and suffer its volatility.
The true spirit of the HODL is perhaps knowing how to wait for the wave that will take you forward, and to let the one that will overwhelm you stoically pass.