Hodling in a Cryptocurrency Wallet
Jan 31, 20225 min read
HODL is a term that originated from a misspelling of the verb "hold," and means buying and holding different cryptocurrencies including Bitcoin (BTC), of course.
The term HODL (or hodl) firstly appeared in 2013 in the Bitcointalk forum’s post. Bitcoin’s price in 2013 was highly volatile, swinging from about $1,100 at the beginning of December to $100 in April of the same year.
What Is hodling?
Let’s read the legendary post where the “hodling” term turned up. At 10:03 a.m. UTC on Dec. 18, Bitcointalk forum a user nicknamed GameKyuubi posted his lamentation: "I AM HODLING"— an almost incoherent passage about the user's poor trading skills and willingness to simply hold his Bitcoin from that point on. The original spelling and punctuation are saved. So, here it is: "I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e," GameKyuubi wrote about the now-famous misspelling of "holding." "WHY AM I HOLDING? I'LL TELL YOU WHY," he continued. "It's because I'm a bad trader and I KNOW I'M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro."
The author assured that it’s the best strategy ever because: "You only sell in a bear market if you are a good day trader or an illusioned noob. The people in between hold. In a zero-sum game such as this, traders can only take your money if you sell."
It didn’t take long, "HODL" had become an internet meme. At first, the memes referenced the movies ‘300 and Braveheart’, but now you can find countless HODL memes surviving on the waves of the Net. You can even buy a T-shirt or other items with some “hodling” inspired mottos.
The approach to ‘hodl’ your crypto is an attempt to time the market and simply hold your coins for better times.
The concept occurred because the prices of Bitcoin and other cryptocurrencies are highly volatile and unsustainable, but HODLers neglect even large price swings. They just HODL.
It seems that it’s based on the fact that long-term crypto HODLers continue investing because they believe that cryptocurrencies will at some point replace fiat money as a keystone of all governmental economic structures. As they say, “All is for the best in the best of possible worlds”.
Thanks to volatility, the market can have extreme peaks and valleys. At least, you can hold a definite amount of cryptos and sell another one to your investment edge and decrease the risk of losing everything.
The mistake many HODLers make is to buy high when everyone is going mad and then sell your assets hastily when the price suddenly drops to the bottom.
Just ask yourself — maybe you’re greedy, maybe it’s a tricky FOMO and FUD that is playing with your mind?
- FOMO — is a shortened version of “Fear of Missing Out”, it’s when you have anxiety that you might miss out a potentially high-profitable investment or trading opportunity.
- FUD — stands for “fear, uncertainty, and doubt”, and it’s when someone spreads doubt about a definite token or project to manipulate prices downward.
Where to HODL coins
HODLing is a long-term strategy, and that means you need to take extra care with your storage options. So start by looking for a crypto wallet that you can use to store your crypto coins. Read about different types of wallets in this article.
Briefly, cold wallets are not connected to the Net, but hot wallets are.
The Success of the HODL
Do we have at least one example of a successful hodling case? Yes, sure. Here’s one. Above mentioned GameKyuubi hodled his Bitcoin while it was at $447. With the price currently being about $42, 191. It looks like a success, as the price enormously jumped and brought a fat profit to the famous HODLer.
Of course, we can’t claim that trading tool isn’t profitable, but hodling is just adding diversity and being an option to look at. Talented and experienced traders who are able to sell their crypto at top prices could definitely gain a larger return and far quicker. On the other side, there’s a huge risk to lose all at once. It's not a surprise that timing the market is extremely difficult, and you never know what’s going to happen in the volatile market. Do you remember an old but good saying — “You’ll never know until you try”? That could be said about trading crypto, it’s not for those who aren’t skilled enough and easily scared.
Hodling is a perfect way for newbies, who invest money and don’t know what to do after that step. They can just hodl till the perfect moment to sell their funds, but they also should be risk-sensitive and knowledgeable to start trading in an effective way.
Risks of hodling
Let’s face the ruth, that would be quite strange for one in crypto to be afraid of the risks involved. Yes, that’s a quite swinging thing, as it’s often with finances. That’s better not to embrace HODL as a game where you will never lose. There is no such thing when talking about money. So what exact risks are possible?
The prices of cryptocurrencies are very unstable. Investors should be ready to experience the tough ups and downs of their assets values. It’s highly possible that a HODLer will gain nothing from just sitting and waiting for a miracle while others are risky enough to get millions of dollars trading their crypto funds. The main risk is, possibly, just to stay retired.
Is it time to SODL?
SODL is the opposite of HODL. As you can guess, it’s another misspelled word — “sell.” You're the one who is responsible for the decision of whether to HODL or SODL.
Hodling didn’t work many times because of the unpredictable volatility of the market. Obviously, you never know how the market will act. This is the major reason why that’s hard to predict when to buy, sell, or HODL your cryptocurrency. Always stay curious and open-minded, rather than sticking to one definite strategy. If you HODL any cryptocurrency, keep an eye on the news, events, charts that empower you with useful information on crypto prices.