What Does HODL Mean? How a Typo Became a Crypto Meme

The same philosophy should work for high-quality cryptocurrencies as well. Even a long-term cryptocurrency investor would be well-served to articulate clear how to buy sparkpoint goals and to monitor the emerging space for systemic risks. Jason Porter, senior investment manager at Scottish Heritage SG, says the HODL strategy can be particularly useful for crypto investors during market weakness, such as 2022’s crypto winter.

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4. Much like the term itself, HODL encourages users to hold onto their tokens for rewards in the Binance coin (BNB) that are distributed every three days.
5. Decentralization is the major feature and advantage of cryptocurrency, as it is not issued by a central authority such as a country’s central bank.

Hodl as a strategy

Before investing, review the company’s standing, looking at things like earnings and sales, vision and background of management, and the overall status of the industry. The exact origin of HODL is well established, and the context surrounding it offers a good lesson to cryptocurrency traders and those who would like to get started trading crypto. The term HODL emerged from a 2013 message board post on the Bitcointalk forum as an errant misspelling. HODL is one of those terms that’s shown up amid the rise of cryptocurrency. While it looks like an acronym — one css inliner tool email design reference of those terms like FBI or KFC that abbreviates a word into its initials — HODL is simply a misspelling of the word hold, albeit one that caught on for the silliness of its mistake.

HODL = HOLD

Ben Gagnon, chief mining officer for Bitfarms, says HODL is more of a mentality than an investing strategy. The term almost immediately became a meme via social media, and the misspelling continues to live on in internet message forums such as the infamous Wall Street Bets board on Reddit. An introduction to cryptocurrencies and the blockchain technology behind them. Learn how to buy Reddit stock and what you should know before investing in the recent social media IPO.

What Is HODLING?

The devotion among HODLers comes from the culture surrounding Bitcoin and other cryptocurrencies, says David Duong, head of institutional research at the cryptocurrency exchange why is bitcoin capped at 21 million Coinbase. You’re scrolling through social media, and you encounter someone saying that they’re “HODLING” or telling someone else to “HODL.” Confused? Here’s what the word means in the world of cryptocurrency and finance—and why it’s not misspelled. Bitcoin’s extreme volatility has produced a handful of horrendous annual returns throughout the years.

Since its debut in 2009, Bitcoin’s value has climbed from just pennies to more than $70,000 at one point. So, a long-term buy-and-hold approach would have returned traders many times their initial investment, because the strategy prevented them from selling when things got tough. With a relatively short history compared to other types of assets and fiat currencies, cryptocurrencies face a future with lots of unknowns.

Based on these principles, the best time to HODL is now, always, and forever. A true believer would always hold on to their tokens, even if markets crash or become extremely volatile. HODLing becomes an ideological belief about the long-term prospects of blockchain technology, cryptocurrencies, and the communities that have formed around them. The term originated from a 2013 online post to the Bitcointalk forum where the typo appeared. The price of Bitcoin in 2013 was volatile at the time, surging to over $950 at the beginning of December 2013, up from just over $130 in April of the same year. The poster encouraged people not to sell and that they were “hodling” sic.

The volatility is more extreme, but the long-term gains have been quite appealing. Blind faith in a product or idea might seem like a poor quality for an investor — like somebody refusing to sell shares of Blockbuster when Netflix was first on the rise. But according to financial planners and analysts, it’s also a rational response to a market whose ups and downs are exceedingly difficult to predict. GameKyuubi explained in the post that he planned to “hold” his bitcoin (BTC) investments because he knew he was a bad trader.