What is HODL? 10 Cryp­to Slang Terms Explai­ned

The main dif­fe­rence is that HOD­Ling often invol­ves the sup­port of a com­mu­ni­ty on a cryp­to forum, which encou­ra­ges inves­tors to wait out rough peri­ods in the mar­ket. The buy-and-hold stra­tegy, on the other hand, has no social com­po­nent. Today, Bit­co­in pri­ces are also down 59% in 2022 as rising inte­rest rates have trig­ge­red a sell-off in cryp­to­cur­ren­ci­es and other risk-on assets.

HODL has sin­ce beco­me a stra­tegy used by peo­p­le who admit they do not have the skills to do short-term trades — such as scal­ping, day tra­ding, or swing tra­ding. The term HODL has also inspi­red the crea­ti­on of a simi­lar term often, BUIDL, which is com­mon­ly used by the cryp­to­cur­ren­cy com­mu­ni­ty to refer to the many kinds of appli­ca­ti­ons that are being built within the block­chain indus­try. Even though the word star­ted out as a meme, it has beco­me wide­ly accept­ed in inves­t­ing jar­gon as a word for hol­ding cryp­to­cur­ren­ci­es with so-cal­led dia­mond hands, a refu­sal to sell no mat­ter what hap­pens to pri­ces. Cryp­to­cur­ren­ci­es are con­side­red to be high­ly vola­ti­le assets, and it’s not unu­su­al to see dai­ly pri­ce chan­ges of 20+% in eit­her direc­tion.

How We Make Money

The cryp­to mar­ket cra­s­hes that hap­pen­ed in 2018 and 2020 are per­fect case stu­dies that sup­port the HODL inves­t­ing stra­tegy. In Decem­ber 2017, the pri­ce of Bit­co­in rea­ched $19,700, but by Novem­ber 2018 Bit­co­in fell to a low of $5,500. Then, from 2018 to midd­le 2020 the pri­ce of Bit­co­in (more or less) stay­ed below $10,000, and rare­ly bro­ke the $10,000 mark. 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. It went para­bo­lic, and as a result some day trad­ers made money, but also many peo­p­le lost out on the action (not the HOD­Lers).

• Be sure you know how long it takes to with­draw your digi­tal assets and rese­arch the track record for each vali­da­tor pool.
• During the run-up in the stocks of Game­Stop and AMC in 2021, indi­vi­du­al trad­ers ral­lied around the phra­ses, egging each other on to con­ti­nue to hold or even buy more on the dips.
• 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.
• Lucki­ly, many belie­ve that Bit­co­in is still in its infan­cy and you may still be ear­ly if you start inves­t­ing now.

The cryp­to­cur­ren­cy world is full of exci­ting and inte­res­t­ing eccen­tri­ci­ties, inclu­ding the lin­go. Hop­eful­ly, by going through this artic­le, you have fami­lia­ri­zed yours­elf with some of the more com­mon uni­que ter­mi­no­lo­gies used within the block­chain space. The term ‘flip­pe­ning’ is used within the cryp­to cir­cles to refer to a hypo­the­ti­cal moment in which the mar­ket capi­ta­liza­ti­on of Ethe­re­um sur­pas­ses that of Bit­co­in. The lat­ter is the oldest and lar­gest cryp­to­cur­ren­cy by net­work value and Ethereum’s mar­ket cap has trai­led Bitcoin’s for seve­ral years. In cryp­to, the com­pa­ra­ble stra­tegy to value invest­ment would be ‘HOD­Ling,’ which works the same way. An inves­tor iden­ti­fies a pro­ject with gre­at poten­ti­al and invests in it for the medi­um to long term.

HODL Mea­ning: Hold On for Dear Life

It may strike you as a mis­s­pel­ling, and you will be right, but within the block­chain space, that spel­ling is cor­rect. With all the atten­ti­on, jar­gon that was once just used for insi­de jokes in ear­ly cryp­to­cur­ren­cy chat rooms and on Red­dit threads has now beco­me a part of the dia­lo­gue. The offers that appear on this site are from com­pa­nies that com­pen­sa­te us. But this com­pen­sa­ti­on does not influence the infor­ma­ti­on we publish, or the reviews that you see on this site.

• It’s simi­lar to the buy-and-hold stra­te­gies used by many stock mar­ket inves­tors.
• Other users found his spel­ling mista­ke hila­rious and they beca­me ‘hod­lers’ too.
• U.S. Tre­asu­ries (“T‑Bill”) inves­t­ing ser­vices on the Public Plat­form are offe­red by Jiko Secu­ri­ties, Inc. (“JSI”), a regis­tered bro­ker-dea­ler and mem­ber of FIN­RA & SIPC.
• The­se terms stand in con­trast to “paper hands,” tho­se who are wil­ling to sell when vola­ti­li­ty rat­che­ts hig­her.
• GameKyuubi wro­te his post on the 18th, attemp­ting to com­mu­ni­ca­te that he was chan­ging tact to his Bit­co­in invest­ment.

U.S. Tre­asu­ries (“T‑Bill”) inves­t­ing ser­vices on the Public Plat­form are offe­red by Jiko Secu­ri­ties, Inc. (“JSI”), a regis­tered bro­ker-dea­ler and mem­ber of FIN­RA & SIPC. When you enable T‑Bill inves­t­ing on the Public plat­form, you open a sepa­ra­te bro­kera­ge account with JSI (the “Tre­asu­ry Account”). SPEDN encou­ra­ges peo­p­le to use cryp­to­cur­ren­ci­es in the real world to buy goods and ser­vices, or sim­ply to pay their bills with cryp­to.

Regis­ter On Phem­ex Now To Begin Tra­ding

This mate­ri­al is not inten­ded as a recom­men­da­ti­on, offer, or soli­ci­ta­ti­on to purcha­se or sell secu­ri­ties, open a bro­kera­ge account, or enga­ge in any invest­ment stra­tegy. “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”. Cryp­to HOD­Lers, like buy-and-hold stock inves­tors, pri­de them­sel­ves on “hol­ding on” by not sel­ling their cryp­to­cur­ren­cy, no mat­ter what hap­pens in the cryp­to mar­kets. In con­trast, other inves­tors choo­se to time the mar­ket, which leads them to make short-term decis­i­ons or trades. Com­pared to buy­ing and hol­ding, mar­ket timing needs a lot more skills and exper­ti­se, mea­ning beg­in­ners have a dis­ad­van­ta­ge with this stra­tegy as oppo­sed to value invest­ment.

• Some cryp­to­cur­ren­ci­es are jokes, others are money-making frauds, and ano­ther group has all the right inten­ti­ons but fla­wed tech­ni­cal designs.
• Other long-term BTC hol­ders who resis­ted sell-offs star­ted describ­ing them­sel­ves as “HOD­Lers,” and HODL cul­tu­re was born.
• Sato­shi Naka­mo­to, the crea­tor of Bit­co­in, desi­gned it as a medi­um of exch­an­ge and a store of value, sug­gest­ing a long-term use case.
• Vola­ti­li­ty pro­files based on trai­ling-three-year cal­cu­la­ti­ons of the stan­dard devia­ti­on of ser­vice invest­ment returns.

The HODL token may seem like an attrac­ti­ve source of pas­si­ve inco­me, but the pri­ce of a HODL token is down more than 99% from its all-time high. A 10% tax is appli­ed to each HODL tran­sac­tion, and the tax is auto­ma­ti­cal­ly liqui­fied and con­ver­ted to BNB (BNB). That BNB is then trans­fer­red to a reward pool and is dis­tri­bu­ted every seven days to inves­tors who hold HODL tokens in their wal­lets. Even bil­lionaire inves­tor Ray Dalio said he was wrong about 66% of the time he per­so­nal­ly dis­agreed with the “buy and sell” decis­i­ons of his hedge fund’s auto­ma­ted quan­ti­ta­ti­ve inves­t­ing pro­cess. The “Ora­cle of Oma­ha” famously encou­ra­ged inves­tors never to own a stock for 10 minu­tes that they wouldn’t be com­for­ta­ble hol­ding for 10 years.

The Deve­lo­p­ment of Cryp­to Regu­la­ti­on: Brief Intro­duc­tion

Our edi­to­ri­al team recei­ves no direct com­pen­sa­ti­on from adver­ti­sers, and our con­tent is tho­rough­ly fact-che­cked to ensu­re accu­ra­cy. So, whe­ther you’re rea­ding an artic­le or a review, you can trust that you’re get­ting cre­di­ble and depen­da­ble infor­ma­ti­on. Dif­fe­rent count­ries and par­ties express dif­fe­rent atti­tu­des towards the use of cryp­to­cur­ren­ci­es. It can signi­fi­cant­ly hin­der their role in sup­port­ing inter­na­tio­nal tran­sac­tions, affec­ting the value of cryp­to­cur­ren­ci­es. Unfa­vorable poli­cy-making and public per­spec­ti­ve might drag down the asset value for the long term. Long-term HOD­Lers may use DCA stra­te­gies to add to their posi­ti­on, espe­ci­al­ly during bear mar­kets.

• The inves­tor sen­ti­ment cycle is a visu­al repre­sen­ta­ti­on of the emo­ti­ons a typi­cal inves­tor expe­ri­en­ces based on the per­for­mance of the investor’s port­fo­lio over time.
• Just as with stocks, bonds, mutu­al funds, and ETFs, inves­t­ing in cryp­to is ris­ky.
• So you buy, you hold on for dear life — hodl — and you build wealth in the long haul.
• To under­stand and be part of con­ver­sa­ti­ons within cryp­to enthu­si­ast cir­cles, you need to know the community’s lin­go.
• Inspi­red by the mis­s­pel­ling of HODL, cryp­to com­mu­ni­ties also encou­ra­ge each other to SPEDN (spend) or BUIDL (build).
• “HODL” is a term that is often used in the Bit­co­in invest­ment com­mu­ni­ty.

It does­n’t mat­ter which cryp­to­cur­ren­cy is in your port­fo­lio, as long as you hold it for a few years (or more) befo­re sel­ling. The mis­s­pel­led “HODL” quick­ly cir­cu­la­ted among the cryp­to com­mu­ni­ty, and soon after tur­ned into an inter­net slang to indi­ca­te when a per­son holds bit­co­in rather than sel­ling it. Use of the term was later exten­ded to include other cryp­to­cur­ren­ci­es.

“HODL,” one of the most fre­quent­ly used terms in the cryp­to­cur­ren­cy world, ori­gi­na­ted years ago from a typo.

It refers to a situa­ti­on when a cryp­to inves­tor has encoun­te­red a mas­si­ve loss by being on the wrong side of a trade. As we have men­tio­ned befo­re, cryp­to­cur­ren­ci­es are high­ly vola­ti­le assets, and the­re is a high chan­ce that a trader can lose their invest­ment quick­ly. HOD­Ling is an invest­ment stra­tegy deri­ved from the tra­di­tio­nal finan­cial world whe­re it is refer­red to as buy and hold.

Tra­ding vs. HODL: Who Makes The Big­gest Pro­fit?

Peo­p­le who HODL cryp­to must belie­ve their pre­fer­red coins will gain wide­spread adop­ti­on (or at least have a net increase in value) while remai­ning calm amidst signi­fi­cant pri­ce swings. The cor­ner­stone of HODL’s appeal is its simplicity—novice inves­tors can under­stand how to HODL within a few minu­tes. While big-league inves­tors have the know­ledge and resour­ces to capi­ta­li­ze on small pri­ce chan­ges and vola­ti­li­ty, ama­teurs are unli­kely to pre­dict trends and act on them in time to pro­fit (or mini­mi­ze los­ses). When HOD­Ling, buy­ers rese­arch and purcha­se assets they’re con­fi­dent in, then hold on to them. JSI and Jiko Bank are not affi­lia­ted with Public Hol­dings, Inc. (“Public”) or any of its sub­si­dia­ries.

Dive deeper into cryp­to tra­ding with dYdX

Cryp­to is still rela­tively new, so we can’t look back over time and see how the HODL stra­tegy has per­for­med. Alt­hough buy-and-hold may be an effec­ti­ve approach when it comes to inves­t­ing in stocks, we still don’t know if it works for digi­tal assets. It’s important to con­sider cryp­to­cur­ren­cy vola­ti­li­ty in your invest­ment decis­i­ons.

FUD

HOD­Ling is an easier and more ratio­nal method to take when inves­t­ing in block­chain pro­jects. Value inves­tors such as War­ren Buf­fett use this stra­tegy when inves­t­ing wher­eby they iden­ti­fy underva­lued com­pa­nies, buy the stocks cheap and hold them for seve­ral years. The idea is that the value of the stocks would have risen con­sider­a­b­ly within this peri­od. Others say HODL until your coin beco­mes a ful­ly spen­da­ble cur­ren­cy and you won’t need to worry about having to sell it back any­mo­re. The risk here is that not all coins are crea­ted equal, and no one can gua­ran­tee the future of any cryp­to and its abili­ty to beco­me a full-fled­ged cur­ren­cy. This is espe­ci­al­ly true with all the new Cen­tral Bank Digi­tal Cur­ren­ci­es (CBDC) that many govern­ments around the world are deve­lo­ping.

What is the dif­fe­rence bet­ween HODL and a buy-and-hold stra­tegy?

This is important as it can help spur adop­ti­on of cryp­to as a pay­ment method. Mean­while, BUIDL encou­ra­ges peo­p­le to roll up their slee­ves and build decen­tra­li­sed appli­ca­ti­ons, plat­forms and tools that impro­ve the cryp­to eco­sys­tem. The term HODL began as an acci­den­tal (bevera­ge indu­ced) mis­s­pel­ling of ‘hold’. He is also a staff wri­ter at Ben­zin­ga, whe­re he has repor­ted on brea­king finan­cial mar­ket news and ana­lyst com­men­ta­ry rela­ted to popu­lar stocks sin­ce 2014. Mr. Dug­gan is also the aut­hor of the book “Bea­ting Wall Street With Com­mon Sen­se” and has con­tri­bu­ted news and ana­ly­sis to U.S.

Refe­rence to any spe­ci­fic stra­tegy, tech­ni­que, pro­duct, ser­vice, or enti­ty does not con­sti­tu­te an endor­se­ment or recom­men­da­ti­on by dYdX Tra­ding Inc., or any affi­lia­te, agent, or repre­sen­ta­ti­ve the­reof (“dYdX”). DYdX makes no repre­sen­ta­ti­on, assu­rance or gua­ran­tee as to the accu­ra­cy, com­ple­ten­ess, time­line­ss, sui­ta­bi­li­ty, or vali­di­ty of any infor­ma­ti­on in this Artic­le or any third-par­ty web­site that may be lin­ked to it. You are sole­ly respon­si­ble for con­duc­ting inde­pen­dent rese­arch, per­forming due dili­gence, and/or see­king advice from a pro­fes­sio­nal advi­sor pri­or to taking any finan­cial, tax, legal, or invest­ment action. Just as with stocks, bonds, mutu­al funds, and ETFs, inves­t­ing in cryp­to is ris­ky. The pri­ce of digi­tal assets fluc­tua­tes signi­fi­cant­ly, so it’s important to pay atten­ti­on to the mar­ket and do your rese­arch befo­re inves­t­ing.

What does HODL mean in cryp­to?

HODL, or “Hold On for Dear Life,” is now a wide­ly known con­cept in the cryp­to com­mu­ni­ty that refers to the stra­tegy of not sel­ling your digi­tal assets, even amid extre­me pri­ce chan­ges in the mar­ket. And given Bitcoin’s latest bout of vola­ti­li­ty, HODL remains rele­vant a deca­de later in 2023. It is used in the cryp­to eco­sys­tem to refer to a stra­tegy of hol­ding onto Hexn bit­co­in hol­dings through its various pri­ce fluc­tua­tions and vola­ti­li­ty. The acro­nym is a mis­s­pel­ling of the word “hol­ding” by a user on an online forum. Typi­cal­ly used by Bit­co­in maxi­ma­lists, a HOD­Ling stra­tegy is simi­lar to the con­ven­tio­nal buy-and-hold inves­t­ing stra­tegy. HODL may also refer to the HODL token on cryp­to­cur­ren­cy exch­an­ge Binance’s Smart Chain.

HOD­Ling might not be the best stra­tegy if the inves­tor is loo­king for short-term gains. Even though trad­ers don’t often sell their posi­ti­ons at the abso­lu­te peak (becau­se they can­not pre­dict it), HOD­Ling over time gene­ral­ly will give you posi­ti­ve returns. Even if you bought in late 2017 at $19,000 and sold in ear­ly 2021 at $40,000, you would have had a 110% increase on your invest­ment.

Alter­na­ti­ves to HOD­Ling

For tho­se who invest in cryp­to­cur­ren­cy, HODL has beco­me a ban­ner pro­clai­ming their long-term alle­gi­ance to digi­tal cur­ren­cy. The­se terms stand in con­trast to “paper hands,” tho­se who are wil­ling to sell when vola­ti­li­ty rat­che­ts hig­her. The best time to HODL a cryp­to­cur­ren­cy is often sub­jec­ti­ve and depends on various fac­tors, inclu­ding mar­ket con­di­ti­ons, par­ti­cu­lar cryp­to­cur­ren­ci­es, and indi­vi­du­al finan­cial goals.