HODL a word prominently used in crypto circles, and if you’ve seen a thread or followed up on the blockchain business, you’ve probably read that four-letter word: HODL.
What does HODL mean?
While it’s used by some people as an acronym for Hold On (For) Dear Life, it actually just means hold – don’t buy more for now, but don’t sell what you have. Generally, the term is only really used in the crypto world, where prices are super volatile and can drastically change at any point.
Why do they say HODL not hold?!
The term HODL (or hodl) originated in 2013 with a post to the bitcointalk forum. The price of bitcoin had surged to a high of over $1,100 at the beginning of December 2013 from under $15 in January 2013 . In the 24 hours to 10:00 a.m. UTC, Dec. 18 – possibly in response to reports of a Chinese crackdown – the price of bitcoin fell 39%, to $438 from $716, according to CoinDesk's bitcoin price index.
What is HODLING?
At 10:03 a.m. UTC on Dec. 18, GameKyuubi posted "I AM HODLING," a drunk, semi-coherent, typo-laden rant about his poor trading skills and determination to simply hold his bitcoin from that point on. "I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e," he wrote about the now-famous misspelling of "holding." "WHY AM I HOLDING? I'LL TELL YOU WHY," he continued. "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 pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro."
He concluded that the best course was to hold, since "You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell." He then confessed he'd had some whiskey and briefly mused about the spelling of whisk(e)y.
Within an hour HODL had made its way into memes: the movies 300 and Braveheart provided the initial source material, but there are now countless HODL memes floating around the internet (Game of Thrones' Hodor is a favorite subject).
So why do people HODL?
Just like financial assets, you’ll hold stocks as a long term solution, whether you’re expecting the value to go up and up and up or because you can’t be bothered with checking everything day-to-day and trust that in the long term it’ll rise steadily.
In the short term, if you’re advised to hold, it suggests just hanging tight as all is probably good, so there’s no reason to sell up but it’s also not worth buying loads more just in case things go south.
The same applies to crypto. If you see the value dipping or surging before your eyes, it can be easy to think that you need to buy more or sell, but you can just breathe…and hold…and hope it all steadies out in your favour. That’s a hold. Though, according to the internet, it can also be a #HODL.
Given how volatile swings are when it comes to cryptocoins, the need to make a decision on HODLING occurs more frequently than with traditional stocks. This is because HODLING is a middle ground where you’re assuming things will work out, instead of putting more money into assets, or selling assets when part of you thinks they could be worth much more tomorrow.