The first time you see “HODL” when someone is discussing cryptocurrencies, the word causes you to stop reading. You think: “Is it a misspelling?” Well, yes it is – at least it was mistyped originally. Now, rather amusingly, HODL has spawned a life of its own. It has evolved to represent a long-term trading strategy and philosophy for crypto investors.
With the launch of our latest campaign – HODL, featuring Kristian Nairn – we thought it would be a good idea to explain in detail what this unusual slang term really means. Better yet, here is Kristian with the explanation:
History of HODL
HODL has become an acronym (or even backronym) for “hold on for dear life”, meaning that even when investors are in the deep red with their cryptos, they should not buckle under pressure and sell, driven by the belief that they will, ultimately, reap great rewards, once mass adoption has been achieved.
The origin of HODL can be traced back to December 18, 2013, and a legendary, whiskey-fuelled rant on Bitcoin Forum by someone calling themselves GameKyuubi.
To provide context, just before the series of poorly written posts were typed – or mistyped – the price of bitcoin had fallen almost 40 percent, from $716 to $438 in 24 hours, according to CoinDesk. The pullback was likely to have been triggered by reports of a crackdown on the original crypto in China. GameKyuubi made clear his or her intentions.
“I AM HODLING,” GameKyuubi wrote, before going on to explain a fair amount of whiskey had been consumed and the reason for “HODLING”. Almost immediately, the funny series of Bitcoin Forum posts were transformed into internet memes, with references to fighting films 300 and Braveheart being especially popular.
More than a Meme: HODL as a Strategy
The memes helped lift HODL from a mistyped “hold” to a widely adopted slang term and trading strategy used in the cryptocurrency community. Quartz heralded it as one of the most important terms in crypto culture in 2017, describing it as a determination to “stay invested in bitcoin and not to capitulate in the face of plunging prices”.
Famous Examples Where HODL Should have been Adopted
There is certainly great potential for HODLing as an investment strategy, and not buckling under pressure, as history shows us – and not just in the cryptocurrency world. One of the most notorious examples of failing to “HODL” happened in the mid-1970’s when Ronald Wayne, Apple’s third co-founder – alongside Steve Jobs and Steve Wozniak – sold his 10 percent stake in the then-start-up back to the other two co-founders for $800.
In August 2018, Apple achieved the historic milestone of reaching a market capitalisation of $1 trillion. Had Wayne adopted a HODL mentality, his Apple stake would be worth around $100 billion today.
Similarly, when another tech giant, e-commerce titan, Amazon first floated, it was worth $18. It dropped to just $1.5, leading many early investors to sell their assets. Now, however, a single stock is worth around $1,700. There are numerous other instances of where a HODL philosophy would have proved the right course of action (or inaction) in other investment spheres – including real estate and especially in cryptos.
HODLing Cryptocurrency Positions
Of course, it is impossible to predict the future, but Jay Smith, one of leading global social trading and investing platform eToro’s most recognisable traders, believes staying strong will reap the biggest rewards. Full-time trader Smith – a.k.a.jaynemesis on eToro– describes his trading style as “fundamentals, future and HODLing”.
Of the potential of cryptos, he continues: “I’ve always been a fan of automation, futurology and transhumanism. On top of that, I am interested in politics, ideology and economics. Cryptocurrencies are a melting pot for all of these things, experimenting with new economic models, governance models, moral and ideological models and offer massive advantages over the systems they aim to replace.”
Smith adds: “I firmly believe that cryptos will change the world, replacing stock markets, most currencies and powering everything from machine-to-machine payments and the Internet of Things through to streaming media, prediction markets, governance systems, voting systems, even potentially the internet. That being said, there is a long way to go, we are in the very early stages for most of these areas.”
eToro is a regulated multi-asset investment platform that has been offering investors access to cryptoassets since 2014. The platform now offers 12 cryptoassets (Bitcoin, Ethereum, Bitcoin Cash, XRP, Litecoin, Ethereum Classic, Dash, Stellar, NEO, EOS, Cardano and IOTA) as well as crypto/crypto pairs and crypto/fiat pairs. eToro acts as a bridge between the old world of investing and the new, helping investors navigate and benefit from the transition of assets to the blockchain. eToro is the only place where investors can hold traditional assets such as stocks or commodities alongside ‘new’ assets such as bitcoin.
Original Article – eToro blog
eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Cryptocurrencies can fluctuate widely in price and are, therefore, not appropriate for all investors. Trading cryptocurrencies are not supervised by any EU regulatory framework.
Past performance is not an indication of future results. HODL is not investment advice. Your capital is at risk.
Cryptocurrency Bear Market: Four Options – Choose Wisely
In the decade since the introduction of bitcoin, it has been a rollercoaster of a ride for cryptocurrency investors – especially after the start of the bull run late in 2017. There have been thrills and spills, and more ups than downs across the 10 years. Certainly, those who were clever – or lucky – enough to invest in the early days will be very pleased with their yield.
Much like a rollercoaster, following a steep ascent comes an exhilarating – sometimes scary – drop, and that has been the case for bitcoin and the other major cryptos in 2018.
There is talk of another bull run on the horizon, though whether it will happen is anyone’s guess. So what strategies do crypto investors employ in a bear market? Basically, you have four options – as listed below. Choose wisely.
- Short sell
“Shorting” is when a trader backs a certain market to decline. If their hunch is correct, then they will benefit. Arguably the most famous example of short selling happened in September 1992, when Hungarian-American investor George Soros netted approximately $1 billion after correctly predicting the British pound would drop when it was forced out of the European Exchange Rate Mechanism.
Shorting is made possible through Contracts For Difference (CFDs), or derivatives, as they allow the trader to sell assets he or she doesn’t actually own. Simply put,…
eToro and Mumsnet research reveals over half of Mums (55%) want to take control of their finances
New research from Mumsnet and eToro busts the age-old myth that women aren’t interested in their own finances and investments.
In a new survey of 1,000 mums*, Mumsnet and eToro asked how they approach their investments. Research reveals just under half (47%) of respondents know a little or a lot about investing, while over half (55%) want to take control of their finances and invest on behalf of themselves.
The biggest drivers for mums looking to invest are to generate a long-term return (73%) and to save for their children’s future (71%). The research also reveals mums are more adventurous in their investment outlook than many would think.
When considering investment options, mums are already knowledgeable about cryptoassets. Four-fifths (4 out of 5) are familiar with the term cryptocurrency and 42% are currently invested or would consider investing in cryptoassets.
Today, 90% of female investors on eToro are invested in cryptoassets, with XRP the most popular cryptoasset. The top five cryptoassets for female investors are:
- XRP (56%)
- Bitcoin (15%)
- Ethererum (10%)
What’s Wrong with Crypto?
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The purpose of this very short survey is to get your thoughts on what is holding back our industry and collectively brainstorm ideas for turning it around.
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