Table of Contents
- What is HODL?
- What is the effect of HODL?
- Who is the HODL strategy suitable for?
- 4 golden times to HODL coin
- 3 effective HODL coin strategies
1. What is HODL?
The phrase that looks like a lot and this and this actually comes from a typo of a user. This person posted on a forum to share why he kept Bitcoin but didn't sell it while the value of this coin plummeted in 2013. The user nicknamed Game Kyuubi in the typing operation mistakenly typed HOLD into HODL and turned this into a popular term in the world.
According to his shares in his post on the bitcointalk forum, Game user Kyuubi answered everyone's question why he is still holding Bitcoin on the decline. At that time, Bitcoin had just made a record increase from 130 USD to reach 1,130 USD. However, just 2 weeks later, the value of BTC began to rapidly evaporate. Instead of selling off to cut profits or reduce losses like many people, the Game Kyuubi guy decided to keep BTC.
Since then, the act of holding coins and waiting for the right opportunity has been assigned to the phrase HODL and is prevalent to this day.
2. What is the effect of HODL?
The HODL coin of the Game Kyuubi guy may not have an immediate effect. However, 4 years later, the Bitcoin price hitting the $20,000 mark has brought in a profit of more than 4000%. At this time, investors really understand about the smart HODL coin strategy.
HODL is a strategy not only applied to cryptocurrencies. This was also one of many of the businessman Warren Buffet. He applied this strategy to the stock market and rose to the top of the richest people in the world thanks to it. His immortal saying is also attached to the motto of HODL coin lovers: "The market is where money flows from the pockets of the impatient to the pockets of the calm".
In short, HODL has the appearance of a long-term investment strategy, based on an accurate assessment of the market as well as the coin's potential. HODL may not bring huge profits in the short term. But this will be a long-term investment with many promises of high returns.
3. Who is the HODL strategy suitable for?
As Warren Buffet said, the person who can apply the HODL strategy is the one who is persistent. The rush or shock when the market fluctuates without forgetting the original HODL purpose easily causes investors to make ill-informed decisions.
In addition to being patient, you also need to be a believer in blockchain technology. There will be times when the market doesn't change the way you want it to. There will be times when your perseverance is challenged. Trust in blockchain will grow more and more will be one of the factors that can help you more determined to pursue HODL to the end
Not only calm, analytical and judgmental mind will be the next condition for you to apply this strategy. You cannot blindly choose a certain coin to HODL without assessing its growth potential. Use your acumen to "sniff" the coins that have not yet reached the peak price. A little investment in analysis will help you find the right coin and make a profit.
Analyzing and forecasting the market is one thing, but how the market moves is another matter. Capital markets cannot be predicted 100% correctly. The coin you believe in the next 12 quarters can grow rapidly may not be what you want. So, a spirit of risk, dare to bet and lose all is also what you need. In particular, money should not be an issue that bothers you too much at this time. If you're still not ready to lose your investment, the psychological pressures of making money will sometimes blind you.
In addition, if you are a person who does not follow the fierce fluctuations of the market today. HODL seems to be a suitable strategy for you to accumulate for the long term and wait for the time to take profits in the distant future. You will not need to monitor the market situation daily or constantly calculate. Your job is to choose the right coin and be ready to HODL to the end.
So is HODL coin a strategy you can always apply anytime, anywhere? Is this the ultimate strategy every investor should follow? Read on to find the answer to the question below!
4. 4 golden times to HODL coin
HODL can be one of the best strategies not only in the crypto world. However, HODL should not always be applied. Please choose 1 of 4 favorable times for HODL coin below so you can optimize your investment.
#first. Downtrend market
No matter how hard it is to predict, the market will come from time to time. Sometimes the fluctuations are so small that you can ignore them. But there are also times when the market volatility is so strong that your chances of HODL coins increase. Some good examples are the weight shift between Bitcoin and Altcoins, when there is a halving orwhen the market capitalization of one of the top 10 coins fluctuates.
The essence of volatility is to find a new equilibrium. So the HODL strategy will be suitable for this moment. Similar to the case of Game Kyuubi, HODL in times of volatility is a safe way to protect an investment. You can sell when the market has returned to a new equilibrium. New market with advantages for the coin you are holding.
#2. economic depression
An economic recession usually occurs when economic activities decline, leading to a decline in investment, production or business indicators. Although it can take place under many different scenarios, the economic downturn will still be a lever to help the economy overcome difficulties and reach a new normal.
Instead of selling off coins to convert into money that is on the verge of losing value due to the economic downturn, HODL is the strategy you should adopt. After the economy recovers, this is your chance to make a profit with currencies that have regained growth.
#3. Not enough knowledge to trade
HODL can be applied to newbies, novice investors. New to the coin industry, having to deal with so many types of information and numbers can make it difficult for you. With a weak knowledge base and eagerness to win, the situation of burning out of pocket is easy to encounter among beginners.
So, slowly HODL coin and take the time to really understand the market, the operating structure would be a wise move. HODL coin until you feel ready to fight will be the key for every investor to get started.
#4. The market is too competitive
A competitive market is a perfect market for HODL coin. Because when developed to a certain degree, competition is predictable. Competition was born to resolve conflicts. After each conflict is resolved, the market will take another step forward on the development path. The more competitive the market, the faster the growth rate.
HODL coin should be the strategy to be applied in this situation. When the competition, conflict occurs, you should HODL instead of trade. And when you reach the level of uncompetitiveness, this is when you should sell and reap huge economic profits.
Seizing the moment to HODL coin, does it possess 100% of the power of this strategy? The capital market is volatile, HODL coin also needs to diversify to like listening depending on the situation. Let's take a look at 3 effective HODL strategies.
5. 3 effective HODL coin strategies
#first. HODL to target then sell
Simply put, you will not sell until you reach the profit you want. This is the simplest HODL strategy. For example, you decide to HODL Bitcoin and wait until the $20,000 mark to sell. However, this simple strategy has many disadvantages.
The time BTC reached the 19,000 USD mark, because the target was not enough, you did not sell. But the volatile market causes the price to drop to $18,500, you lose $500 in opportunity cost. You still can't sell because you haven't reached your desired target.
Therefore, in order to optimize the investment, many investors prefer the flexible HODL way. This helps them avoid missing opportunity costs.
#2. flexible HODL
This is considered the most effective and optimal HODL way. Flexible HODL is when you decide to HODL 1 coin and constantly try to increase the number of coins. At the same time, combined with choosing the time to sell to take profit.
The advantage is that you will get the most out of your investment and will often make a profit. However, you will need to trade off time to research and monitor the market.
#3. Long-term HODL
When you have faith in a certain coin, you can choose long-term HODL measure. As with flexible HODL, you will still focus on increasing the number of coins. However, you will trade with confidence. The time spent on market analysis and assessment will not be much. You can learn and put your trust in a coin for long-term HODL decision.
The biggest disadvantage is that the risk of this strategy is quite high when the capital market is unpredictable and the possibility of failure is still high. However, the advantage will be that once you have found a reliable and good growth coin, your profit will increase day by day.
