The Ultimate Guide To Cryptocurrency Hodling

HODL is a slang term for holding onto your cryptocurrency, rather than selling it. It’s one of the most prominent memes in the bitcoin community, and it’s a bit of an inside joke for people who understand how it came about.

HODL started as a typo, when someone was trying to type “hold” but accidentally hit the L key instead of the O. The typo took off in popularity and became its own thing, inspiring an entire movement around holding onto your cryptocurrencies.

HODLers have their own lingo surrounding their philosophy of cryptocurrency investment. They love to say things like “the moon” and “to the moon” to describe the rapid increase in value they hope will happen soon. They also love to encourage HODLing by talking about how much they’ve made by not cashing out (yet).

What Does It Mean To HODL?

HODL, the acronym for Hold On for Dear Life, is a term that has come to represent the practice of holding on to Bitcoin and other cryptocurrency investments even when the market is crashing. It’s a concept that was popularized by a post on the Bitcoin Forum in 2013 by user GameKyuubi, but it has really become a mantra in the cryptocurrency community.

HODLers believe that there will be an eventual rebound from any crash, and they generally think that investors who sell their holdings during these crashes are making a big mistake. They look to buy low and ride out the dips, hoping to make huge gains when Bitcoin or another cryptocurrency finally reaches its full potential.

HODLers also believe in holding on to Bitcoin because of its decentralized nature—they feel that it is important for there to be some people with significant holdings of cryptocurrencies so that they will continue working towards improving them and keeping them secure

In the crypto world, HODL has come to mean:

  • Holding onto your cryptocurrency
  • A strategy where you hold on to your cryptocurrency and don’t trade with it
  • A longer term investment strategy as opposed to short term trading

Benefits Of Cryptocurrency Hodling

  • HODLing helps you avoid paying taxes. Many governments have issued warnings to citizens about cryptocurrencies, saying that they are not approved tender in any physical form or shape. Cryptocurrencies can be exchanged into fiat currency or another cryptocurrency with relative ease; they cannot be exchanged into real-world goods or services.
  •  One of the most basic reasons why crypto HODLING is so effective is that it’s much easier to maintain your cool in the face of market volatility when you actually believe in the long-term potential of your investment, or at least aren’t emotionally invested in its immediate success.
  • By holding onto your coins instead of selling them, you are keeping your investment safe from the volatility that comes with the crypto market. If you have done your research on a coin, understand its potential use cases, and believe in it long term, then HODLING is the best strategy for you.
  • But HODLING is a great way to offset losses, because if the price of your investment goes down, you’ll always have your original investment while still keeping your original number of coins. Many experienced investors consider cryptocurrency HODLING to be one of the best ways to make money in the long run—but it also comes with some risk.
  • If you are interested in investing in Bitgert BRISE, hodling it can be an effective strategy if you believe the value of a coin will rise and don’t want to risk selling the bitgert coin at a lower price.

Risks Of Cryptocurrency Hodling

  • Due to market’s volatility, If you’re holding onto that precious crypto and it turns out to be worth nothing, you won’t be able to trade it in for some new pants. That said, while keeping your pants in a death grip may not be ideal, HODLING isn’t always a bad idea.
  • There is no guarantee that a coin’s value will rise over time. And even if it does, you could still lose money as the value fluctuates wildly or due to unforeseen circumstances like hacks, regulations, etc.
  • Holding onto your coins means missing out on potential profits from other opportunities and not being able to take advantage of current market conditions.
  • It also means that if something happens to the currency, you won’t have any available cash to help buffer that blow.

How To Mitigate Risks in Crypto Hodling

There are many risks that come with the cryptocurrency market and even more so with holding onto your assets for an extended period of time. However, there are ways to protect yourself from these risks by planning ahead.

Put your crypto in a cold wallet

A cold wallet is a storage device that can be disconnected from any internet source and/or computer. For example, you can store your coins in a USB drive that doesn’t have any ports for connection to anything else.

If you’re someone who wants to hold onto their assets for years or even decades and if you aren’t planning on spending them anytime soon, then it’s recommended that you have them in a cold wallet so that they’re not at risk of being hacked into or stolen.

 

Use multiple exchanges for trading

Not all exchanges are created equal. If you’re planning on trading your cryptocurrency for other cryptocurrencies then it’s best that you use different exchanges so as to spread out the risk of getting hacked into or having your account compromised.