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Understanding the Concept of Hodling

If you had ever participated in a crypto conversation or belong to a crypto community, you have probably noticed that the word “Hold” is frequently misspelled as “Hodl” when discussing the rise and fall of a specific cryptocurrency.

The term “HODLING” was first used in a Bitcoin talk forum post by a user named GameKyuubi. According to the appearance of his post, he was drunk and wanted to convey the message that, despite the drop in price of bitcoin, he would still hold on to it because he is not a good trader.

Hodl literally means “hold on to dear life“. That is, rather than selling a cryptocurrency, it is better to hold it for future profits. It can also be referred to as a buy-and-hold strategy especially for investors who choose to hold an asset for a long period of time and wait for when the coin will rise in value and then take profit.

However, holding a specific cryptocurrency is dependent on the project’s ability to evolve. So, before you begin holding any cryptocurrency, consider factors such as partnership, social media presence, or news, as well as what new features the project is bringing to the ecosystem.

The Benefits of Being a Hodler

  1. As a trader, it allows you to wash your hands of all volatility forecasting.
  2. It allows you to overcome two common destructive news sources as a trader which include: Fear of missing out and Fear, uncertainty and doubt.
  3. Italso reduces stress by cutting down on the amount of time you spend looking at the charts.

The Disadvantage of Being a Hodler

  1. Lost of funds: many traders believed they could access their wallet, only to realize they had lost the private keys, denying them opportunity to access the asset.
  2. Becoming profitable can take a long time. The holding strategy may not be suitable for traders looking for quick profits in the cryptocurrency market.
  3. Iti possible that it will be less profitable than active trading.

Although holding is less risky than trading, as you can see from the reasons to invest listed above, despite the high rates of return, investors should be prepared at all times for how the market will play out.

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