HODL meaning
If you are an investor or trader interested in cryptocurrencies , you have probably heard of ‘ HODL ’. Initially, it was just a misspelling of the English word ‘hold’, but over time it has taken on a meaning of its own. In the most popular definition, HODL means ‘Hold On For Dear Life’. The term was first used in 2013 on a popular Bitcoin forum called Bitcointalk.
What is HODLEN?
HODL means ‘Hold On For Dear Life’. Loosely translated, this means: ‘hold for a good life’. This immediately says a lot. ‘HODLEN’ means nothing more than simply holding your crypto position(s). When you are HODLEN, you simply let your positions run and do not sell them for a longer period of time.
When the term HODL was first coined on the Bitcoin forum, it was seen as a tactic for less knowledgeable investors. “You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold.” wrote the coiner of the term under his username “GameKyuubi.” It was only a matter of hours before HODL was promoted to a popular meme. An internet joke, perhaps; but for many investors, HODL is a very valuable strategy.
GameKyuubi, the creator of HODL, opened his topic when the price of Bitcoin had dropped to $439. His idea? Simply hold. Today, a BTC token costs you more than $43,000.
The strategy explained
HODL is a widely accepted mantra. It is a philosophy and strategy regarding trading in – among other things – digital currencies. The underlying idea is that it is impossible for anyone to beat the market. In addition, only very experienced traders will succeed in realizing high returns in the short term by continuously opening and closing positions.
If you choose this strategy, you assume the following:
- You don’t see cryptocurrencies as a hype, but actually as a future-proof alternative to fiat money.
- Small price movements do not matter that much. It is the price movements within charts that show a long time frame that matter.
- FOMO (Fear of Missing Out) causes losses that are too high. A stable strategy provides more stable returns and a more predictable way of trading.
If you want to apply the strategy, you will have to buy cryptocurrencies and store them for a longer period of time. You do not sell your positions. When the crypto market shows a lot of red figures, this can be difficult. This is why not everyone succeeds in HODLing successfully. In addition, it is of course no guarantee for profit. Not all cryptocurrencies succeed in keeping their heads above water. If you HODL cryptocurrencies with a bad future perspective, you are, as it were, holding on to a sinking ship.
HODLENDING Stocks: Is It Possible?
The term comes from the world of cryptocurrencies. However, this term can be applied quite analogously. That is to say, you can also HODLEN investment products other than cryptos. For example, many stock investors choose to hold their positions so that their portfolio does not become too dependent on small price movements. You could even argue that HODLENing stocks is wiser than HODLENing cryptocurrencies, because cryptos are generally very volatile .