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Main Dictionary H

HODL

HODL — a misspelled word “hold” related to crypto trading. Also, it is an acronym for the phrase “hold on for dear life”. Hold is a strategy of storing cryptocurrencies and waiting for their further increase in value. So, the hodler is a person who is intended to store the cryptocurrency for the long term and won’t sell it.   

How the Word HODL Appeared

It all started in 2013 on the Bitcointalk forum. At that time bitcoin was highly volatile. A user with the nickname GameKyuubi had created a post "I AM HODLING". He was drunk, that's why a post was full of typos and orthographic mistakes. The user was complaining about his bad trading skills. He had concluded that the best tactic for crypto trading is to hold the assets as long as necessary.

The post quickly became a meme. The users were associating the phrase "I AM HODLING" with the movies like “Braveheart" and “300". Also, it is often associated with the character Hodor from the “Game of Thrones" series.

Currently, the HODL strategy is popular on the subreddit r/CryptoCurrency. This method became a kind of philosophy and a way to deal with FOMO (fear of missing out) and FUG (fear, uncertainty, and doubt). These psychological problems are common among novice traders. Also, the HODL memes create a community for many crypto enthusiasts.    

Application of HODL Method 

Sometimes the HODL strategy can be very effective. This strategy implies long-term storage that looks like investing. The “hodling” is contrasted with trading because the traders try to get a profit in short periods from several minutes to several days. 

As for the hodler, they acquire the asset and “forget” about it for months or years. If an investor expects to hold coins for a few months or years, he doesn’t need to react to temporary market crashes, get nervous about what is happening, and also update cryptocurrency rates and the portfolio. They know that the situation on the market will be much more attractive within the week or month.

Of course, the investor monitors the market situation to detect possible growth. But in general, they expect to cash out and get the stablecoins. Stablecoins are the cryptocurrencies pegged to the dollar. A cryptocurrency project for long-term storage should be chosen after a detailed study of the idea, developers, and their goals. After the investment in the little-known start-up, the hodler can end up with a complete loss of funds.

To select a coin to hodl, the investor needs to pay attention to the following indicators:

  • The usefulness of the project and the problems it solves. If the functions of a cryptocurrency solve important problems, then there is a high probability of its successful promotion and growth in price.
  • Collaboration with other companies, projects, and government agencies. This indicator also affects the reliability and relevance of the project.
  • "White Book" and "Roadmap" with the technical aspects and further plans for the development of the project. 
  • The openness of public information about the creators and owners of the platform. Usually, in fraudulent projects, this information is carefully hidden, and the rise in the price of a coin (hype) is short-term, followed by a rebound to a minimum value or complete liquidation.
  • Liquidity and trading volume. Most cryptocurrency exchanges provide reliable information about these indicators, allowing investors to audit the state of supply and demand in the market.
  • The number of holders of the active wallets. This information isn’t always available, but some cryptocurrencies provide such information on their site or monitoring services (CoinMarketCup, CoinGecko).

 Problems with the HODL

The disadvantages of a hodling come from its advantages. If a crypto holder is willing to hold it for several years, they don't pay enough attention to what is happening in the market and miss a profitable opportunity.

The second issue of the hodling is the inability to ensure against the collapse of cryptocurrency projects (their death). On the cryptocurrency exchange, traders for such situations put stop losses or orders to automatically sell an asset if its rate falls below a certain level.

The financial experts confirm that hodling is good for novice traders which don’t have enough experience and may choose the wrong trading strategy. They should hold the assets until they learn more about trading and cryptocurrencies. 

HODL Token

This world is also related to the HODL token. HODL is a decentralized cryptocurrency that runs according to a proprietary method that taxes each transaction and returns a 20% dividend to the holders.    

This word is also related to the HODL token or HODL. HODL is a decentralized token that offers rewards and reflections to the owners. This cryptocurrency works according to the following principles. - 20% Dividend Paid in HODL, 20% of every deal is redistributed to the HODL holders. -5% Development Tax for marketing and development of the coin. You can find this currency on different trading platforms like Facebook, Twitter, Telegram, Instagram, Discord, and YouTube.

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