What is HODL and why has it grown in popularity?

The crypto-vocabulary is rich and contains many unusual words you won’t hear elsewhere. “Hodl” or “hodling” is a widespread term that every crypto investor should know. 

What does HODL mean? 

HODL is a jargon that stands for holding onto a cryptocurrency instead of selling it. At first glance, it might seem like a misspelled expression of the word “Hold”. And that, indeed, seems to be the case. 

In 2013, a crypto enthusiast started a thread called “I am HODLing” instead of “I am HOLDing”. While other acronyms usually don’t stick, this one caught the attention in the crypto community. 

HODL gained even more popularity when it earned a status of a humorous backronym “Hold On for Dear Life”. 

This example perfectly depicts the humor that tends to find its way into mainstream investment communities. 

Currently, “hodling” has become a viable trading strategy since there are usually long term benefits from not selling a cryptocurrency right away.

Is HODL still a good strategy in 2020?

Many investors are still holding tight onto their coins in hopes of seeing them increase in value in 2020. More specifically, 11 million Bitcoin did not move from their wallets in 2019, an incredibly large number when considering that only 18 million Bitcoins are currently in circulation.

Of course, one needs to remember that many of those 11 million Bitcoins are simply inaccessible due to being “lost” for a number of different reasons.

Additionally, a recent article by CNN showed that, over the last decade, Bitcoin was not only the most profitable asset, but it was also worth considering that the term “I am hodling” is more serious than people tend to think.

More specifically, $1 dollar invested in Bitcoin in 2010 is now worth a whopping $90.000 USD.

So, if you are still wondering whether or not HODL is a good strategy, remember that 2020 will come with many exciting events. These include:

  • The next Bitcoin halving (decreasing reward incentives from 12,5 to 6,25 Bitcoin per mined block)
  • The potential development of state-backed digital currencies on the blockchain
  • The creation of Libra, Facebook’s very own cryptocurrency based on blockchain technology
  • And, of course, Bitcoin will continue to increase in popularity for being the first decentralized digital currency.

Final thoughts on HODL as an investment strategy

Over the last couple of years, “hodling” has not been very profitable to cryptocurrency investors. While most are still recouping from their losses, those with an unshakeable belief in the potential of crypto seem to be unbothered.

According to them, the most exciting times for Bitcoin and other cryptocurrencies are laying straight ahead, and the best one can do is wait it out with patience and faith.

What do you think? Is Hodl still a viable strategy? Let us know in the comments below.

Back to top button
Close
Close