Bitcoin has been in the limelight since its first successful rally in 2017. After the first successful rally ending up reaching an all-time high >$19,000, people from all around the world started showing their interest in the Cryptocurrency trade market.
That was just the start of the journey. We are now in 2021 and have already experienced a second successful rally of >$63,000. Seeing how the market has been performing in the last couple of years, people have started considering investing in Cryptocurrency for the long term.
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This is where the concept of ‘HODL’ starts messing with new investors’ minds. They get confused between the terms ‘HODL’ and ‘HOLD,’ and trust us, both hold the same meaning.
What Is HODL?
HODL has become a new term that is thrown around the Cryptocurrency community. Since this term is often used, it has become the slang term that new investors find intriguing.
HODL is the investment strategy where the investors hold all their digital assets no matter how the market performs. When the price plunge starts, the investors often see the asset with negative sentiment. However, the investors who are following the HODL strategy will continue to hold their assets.
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Warp & Weft History Behind HODL
The term first surfaced on a popular Bitcoin Forum named BitcoinTalk. A user named GameKyuubi got a bit tipsy and posted a typo-laden message on the forum that came after restrictions were made on the regulation of Bitcoin.
He moved on with the statement where he went about how people called him a bad trader for not selling off his Crypto assets. Nevertheless, he insisted on holding on to his Crypto assets.
To prove his points, he posted a message, “I AM HODLING.” Since he was drunk at the moment, he made a mistake by typing the wrong spelling of Holding. Since the term, HODL has become one of the common slang used in the Cryptocurrency industry.
Why HODL Your Crypto Assets?
Cryptocurrency is a digital currency powered by Blockchain technology. It functions as a medium of exchange for goods and services and can also be held as an asset. The key feature of Cryptocurrency is its decentralized nature. Due to this nature, it does not have a single authority controlling the network.
Today, Cryptocurrency continues to gain more attention as an asset for investment. The trend of financial decentralization and currency digitalization offer enough room for this industry to grow even further.
Due to its highly volatile nature, Cryptocurrency offers opportunities to the user to make high-risk high-profit investments. However, HODLING can offer more safety to the investor and avoid the risk of buying and selling low.
Risk Associated With HODL
Despite the high rate of return, investors must be wary of the risk HODLING comes with. The price of Cryptocurrency is extremely volatile and gives investors a tough time with extreme ups and downs.
Furthermore, the lifespan of Cryptocurrency is relatively very short compared to other assets and fiat currencies. This leaves Cryptocurrency facing a future with many uncertainties.
The policies over Cryptocurrency have not been established effectively. Hence, this leaves room for Cryptocurrencies used by fraudulent activists.
Closing Thoughts
Even though the term HODL started as a typo error, its effect has been immense. Experts believe that it can be one of the strategies to make money out of the Cryptocurrency investment; they kept the name as it is to dine the holding strategy as HODLing.
We hope that you were able to understand the real concept behind the HODL. If there are more queries regarding Crypto industries and relevant terms used in the industry, drop them in the comment section. We will ensure every query gets answered.
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