A type of passive investment strategy where you hold an investment for a long period of time, regardless of any changes in the price or markets. The term first became famous due to a typo mad
What Is HODL?
HODL is an acronym that stands for “hold on for dear life.” It is a popular meme among crypto investors and a play-on-words on the word “hold.” The term refers to an investment strategy of buying cryptocurrency with the intent of never selling it.
What Does HODL Mean?
HODL is a meme expression for the intent to buy a cryptocurrency and never sell it. The goal of this strategy is to ride out the volatility of crypto investment and eventually benefit from a long-term appreciation of the purchased coin. Although there is no guarantee of price appreciation, cryptocurrency investors adamantly believe that holding a coin long enough will eventually lead to positive returns. In past, this has been particularly true for Bitcoin and Ethereum investments.
The Origin of HODL
A trader called GameKyuubi posted on the Bitcointalk forum “I AM HODLING,” in an attempt to convince others to do the same and not sell in the face of market volatility. His rant continued:
“WHY AM I HOLDING? I’LL TELL YOU WHY […] 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 … Just like that and make a millino bucks sure no problem bro.”
This outburst of emotion hit a nerve with other traders that were trying to navigate the volatility of Bitcoin. Eventually, the meme caught on and others followed his example to HODL their coins and never sell in order to outlast market volatility. When the meaning “hold on for dear life” was attached to the term is unclear.
Understanding the HODL Strategy
The HODL investment strategy ultimately comes down to having extreme conviction in an investment and being committed to not selling no matter how bad a drawdown it experiences. Thus, HODL strategies can be applied to any investment but are best known for referring to cryptocurrencies, and especially Bitcoin. In the HODL strategy, investors must refrain from panic selling when the market is undergoing extreme volatility or extended bear markets.
HODL in the Media
HODL has become a viral meme in the cryptocurrency industry and has achieved mainstream popularity. Different mainstream media outlets, like The Washington Post and CNBC, have covered the meaning of HODL and the underlying investment strategy of crypto maximalists. It is also often combined with other memes in the crypto industry, particularly in the Bitcoin community.
Alternatives to HODLing