The term HODL began as an accidental (beverage induced) misspelling of ‘hold’. But it has come to also mean ‘Hold On (for) Dear Life’ in crypto.
It’s definitely a crypto native term. While Wall Street executives make long-term investments and Wall Street Bets traders have diamond hands. in crypto, we HODL.
And it pays to HODL. While there is incredible volatility in crypto, investors have earned the best returns of any asset class in the world simply by hodling their coins, as you can see in these bitcoin success stories.
What does HODL mean in crypto? HODL Definitions
While the term initially was a direct reference to ‘hold’, in true crypto style, the term was ‘hard forked’ and now carries several meanings. Still, they all carry the same ethos.
The act of holding bitcoin, Ethereum, Dogecoin or other cryptocurrencies and refusing to sell.
A rallying call in the crypto community to encourage people to keep holding their coins even when there are price drops or a bear market begins.
Synonyms: Diamond hands, long-term investment, time in the market beats timing the market, to the moon, long for the culture
Where does HODL come from?
Back in 2013, someone with the username GameKyuubi made a post on the BitcoinTalk forum. After a few whiskeys, they misspelled “I AM HOLDING” and wrote “I AM HODLING” instead. Other users found his spelling mistake hilarious and they became ‘hodlers’ too. Almost a decade later, the crypto meme is still going strong.
Why do people in crypto love to HODL their coins?
Cryptocurrency has been the best performing asset class of the past decade. If you simply bought bitcoin ten years ago and held it until today, you would have made incredible returns. So the reason people HODL crypto is simple; it seems to pay to be a hodler.
Notably, the accidental creator of the HODL meme, GameKyuubi, had a point to make about holding/ hodling:
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.
What he’s suggesting is, that unless you’re a great trader, the HODL investment strategy can be a good option in crypto.
Still, there are other reasons people choose hodling as their investment strategy, such as:
Limiting their taxable events
Not having to monitor the market 24/7
Helping prevent greed and FOMO (Fear of Missing Out)
Moreover, many investors believe that it’s still early days for crypto and there are still incredible gains to be made. They’re holding for the long-term and looking to build life-changing wealth.
What if you don’t want to HODL? Then it’s time to SPEDN or BUIDL
Inspired by the misspelling of HODL, crypto communities also encourage each other to SPEDN (spend) or BUIDL (build). Much like the HODL meme, they’re intended to help grow the crypto space.
SPEDN encourages people to use cryptocurrencies in the real world to buy goods and services, or simply to pay their bills with crypto. This is important as it can help spur adoption of crypto as a payment method. Meanwhile, BUIDL encourages people to roll up their sleeves and build decentralised applications, platforms and tools that improve the crypto ecosystem.
Thinking of HODLING?
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HODL is a crypto slang term meaning to buy-and-hold
buy-and-hold
Buy and hold is a passive investment strategy in which an investor buys stocks (or other types of securities such as ETFs) and holds them for a long period regardless of fluctuations in the market.
indefinitely. It implies not selling when markets go down or become volatile. Sometimes, it is said to mean "hold on for dear life." HODL originated from a typo of "holding" as "hodling" in a 2013 online post.
Crypto investors quickly retrofit HODL as an acronym for “hold on for dear life,” an encouragement to other crypto investors not to sell when prices fall. The meme also acknowledges novice crypto investors that they are not skilled enough to profit from short-term trades amid the notoriously volatile crypto market.
“HODL” is a misspelling of “hold,” referring to the buy-and-hold strategy among cryptocurrency investors. The “hodling” strategy helps investors avoid realizing loss from the short-term volatility of cryptocurrencies and gain returns from long-term value appreciation.
Many folks see cryptocurrency as offering protection against inflation. Bitcoin has a hard cap on the whole number of coins that will ever be minted. For example, as the growth of the money supply overtakes the growth in the supply of Bitcoin, the price of Bitcoin shall increase.
When you use a linked bank account (ACH) to buy crypto or add cash to your account balance, the funds are placed on hold and won't be immediately available to send or cash out. Think of this like depositing a check to your bank account and having to wait for it to clear before you can remove the funds.
HODL is a crypto investment strategy that involves buying and not selling a cryptocurrency even when the market is volatile. In other words, it is the crypto version of coffee can investing where investors buy a token with the intention of holding or HODLing it for a long time.
If you've held crypto for less than a year, you'll pay the short-term Capital Gains Tax rate. If you've held crypto for more than a year, you'll pay the long-term Capital Gains Tax rate.
If you're holding crypto, there's no immediate gain or loss, so the crypto is not taxed. Tax is only incurred when you sell the asset, and you subsequently receive either cash or units of another cryptocurrency: At this point, you have “realized” the gains, and you have a taxable event.
Storing cryptocurrency in Binance is generally considered safe, as they take security seriously and have implemented various measures to protect users' funds. However, it's important to remember that no system is completely foolproof and hacks or losses have occurred in the past.
You can earn passive income using crypto as an opportunity to diversify your investments and earnings. With high rates that far outpace what you get from a bank, you may be drawn to the excitement of the cryptocurrency world.
Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger.
Most financial experts recommend limiting crypto exposure to less than 5% of your total portfolio. Crypto is considered a high-risk asset class. Limiting allocation helps manage overall volatility and risk. Those new to crypto investing may start with 1% to 2% as an introduction.
It exists only in digital form, and although people mainly use it for online transactions, you can make some physical purchases. Unlike traditional money printed only by the government, several companies sell cryptocurrency. Cryptocurrencies are fungible, meaning the value remains the same when bought, sold, or traded.
It depends. Hardware-based wallets generally cost between $100 and $200, though many software-based wallets are free. Most don't require you to actually own any cryptocurrency.
HODL is a crypto slang term meaning to buy-and-hold indefinitely. It implies not selling when markets go down or become volatile. Sometimes, it is said to mean "hold on for dear life."
Here are some of the key differences. Hodling does not increase the number of tokens a person is holding.Staking, apart from blocking the tokens, also rewards the user for validation and other purposes the tokens are staked for. So, the number of tokens increases in staking.
Lower Risk: HODLing is considered less risky, especially when investing in core cryptocurrencies like BTC, ETH, LTC, and BCH 8. Simplicity: It's beginner-friendly and doesn't require constant market monitoring or advanced knowledge of technical analysis 49.
There are several risks associated with investing in cryptocurrency: loss of capital, government regulations, fraud and hacks. Loss of capital. Mark Hastings, partner at Quillon Law, warns that investors must tread carefully in crypto's unique financial environment or risk significant losses.
Remember: the people who HODLed since 2013 shouldered years of heavy losses before their crypto ultimately paid off. The HODL strategy is not suitable for everyone. Understand your own financial situation and risk tolerance before buying crypto.
Introduction: My name is Barbera Armstrong, I am a lovely, delightful, cooperative, funny, enchanting, vivacious, tender person who loves writing and wants to share my knowledge and understanding with you.
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