What is Hodl? What Does the Hodl Strategy Mean?
Just like any investment asset in classical financial markets, the maturity of the investment in Bitcoin and cryptocurrency investments depends on the preference and strategy of the investors. While there are short-term investors who take advantage of instant price movements, there are also long-term investors who are patient and wait for the target time or price they set.
In this article, you can find the story of the use of the word “hold” as “hodl” as a result of a change, the answer to the question of what is hodl, and other terms used for long-term investment strategies.
What is Hodl?
Central banks of the countries that implement the quantitative expansion monetary policy increase the nominal fiat currency supply of that country and print more money and put it into circulation. This causes an increase in inflation and a decrease in the value of the relevant fiat currency. Assets whose total supply is limited in value storage instruments, therefore, ensure that there is no inflation in their own market.
From this point of view, investors invest in assets with limited supply, such as Bitcoin, which are called safe havens in their long-term investments. An investment strategy based on long-term holdings by investors is called hodl in the Bitcoin and cryptocurrency world, as an asset with limited supply will gain value day by day.
How Was the Term Hodl Born?
The emergence of the term “HODL”, which is used to mean “hold for a long time without selling” among cryptocurrency users, has a somewhat amusing story. On the Bitcointalk forum, user named GameKyuubi mistakenly wrote “I am Hodling” in the title of his post on December 18, 2013, instead of “I am holding”. Hodl soon attracted the attention of other users and started to be used by them as well. After this event, 18 December is celebrated as Hodl Day every year in the Bitcoin community.
What is the Hodl Strategy?
With the citations made in the forum and the use of this typo by other users, hodl has been adopted as both a term and a trading strategy. Investors who buy Bitcoin or any other cryptocurrency and keep it for a long time are called hodlers, meaning buying but not selling.
Whether an investor buys Bitcoin or another cryptocurrency and holds it for a long time depends on his confidence in the crypto asset and his own investment strategy. The hodl strategy applied by the majority of Bitcoin investors can be carried out by buying a certain amount of Bitcoin every month, or it can be applied for certain purchases made according to the investor’s own decision.
Another concept that Bitcoin and cryptocurrency investors who implement the Hodl strategy are familiar with is the term “Diamond Hands. When we look at what diamond hands are, it is seen that this term, which came out of the classical financial world, is used to mean that investor holds the crypto asset that has invested decisively and stubbornly, not selling, and trusting this crypto asset in the long term. This is a term that describes the investor behavior profile rather than the investment strategy. It is used to indicate the investor who does not panic when his investments total value falls or fluctuates, and who waits patiently until the target time or price.
In addition to being a cryptocurrency, Bitcoin is also used as a store of value, just like gold, and real estate. It is mentioned in the article Bitcoin as a Store of Value, which includes the details and account scenarios of investors’ long-term investment strategy and accepting Bitcoin as a store of value.
If you are wondering about some of the other concepts that come into our lives with Bitcoin and cryptocurrencies just like hodl, you can read the article 10 Terms That Have Entered Our Lives with Bitcoin and Cryptocurrencies.
