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- The volatility is more extreme, but the long-term gains have been quite appealing.
- Mooning is a related term to ‘When Lambo’ that also refers to stratospheric price rallies.
- Since large is a relative term, a more acceptable definition of a whale is anyone whose singular actions are able to affect the price of an asset.
- It is a misspelling of “hold,” with an interesting story behind it.
- Similarly, you can hold a cryptocurrency for an indefinite length of time, through multiple price changes, because you believe that the coin will do well in the future.
The cryptocurrency world is full of exciting and interesting eccentricities, including the lingo. Hopefully, by going through this article, you have familiarized yourself with some of the more common unique terminologies used within the blockchain space. However, since they have outsized positions, they need to sell while everyone is buying, so they keep shilling the asset as they offload their positions and once they stop pushing it. Typically, the price of the asset comes crashing down as the latter buyers look to exit their positions. The term ‘flippening’ is used within the crypto circles to refer to a hypothetical moment in which the market capitalization of Ethereum surpasses that of Bitcoin. The latter is the oldest and largest cryptocurrency by network value and Ethereum’s market cap has trailed Bitcoin’s for several years.
Under the post-COVID low-interest context with inflation expectation, investors also hold cryptocurrencies for value reserve. The term ‘HODL’ was first used by a BitcoinTalk forum member going by the pseudonym GameKyuubi on December 18th, 2013. GameKyuubi wrote a post to the forum titled “I AM HODLING” and proceeded to pen a semi-intelligible post attempting to explain his new investment strategy while (admittedly) intoxicated. It refers to a situation when a crypto investor has encountered a massive loss by being on the wrong side of a trade. As we have mentioned before, cryptocurrencies are highly volatile assets, and there is a high chance that a trader can lose their investment quickly. Cryptocurrencies are considered to be highly volatile assets, and it’s not unusual to see daily price changes of 20+% in either direction.
Crypto hodl vs. trading
The right time to sell will largely depend on the goals of investing. If these goals are achieved, the coin holder can sell at any price in the market; otherwise, they continue to HODL. HODLing campaigns are also witnessed whenever the price of an asset starts falling. In such a situation, any more selling could lead to further price correction and the best action for the long-term investors is to discourage weak hands from letting go and thereby mitigating further losses.
Indeed, the original HODLer in 2013 had no illusions about their ability to play the market. But the post conveyed a confidence that time would improve Bitcoin’s fortunes. Our partners cannot pay us to guarantee favorable reviews of their products or services. It is important to note that simply enduring short-term discomfort does how to sell your bitcoin from wallet exodus buy bitcoin to transfer not guarantee long-term success. Recent examples of Hodling gone wrong include Terra (LUNA), which became worthless after founder Do Kwon was charged with fraud by the Securities and Exchanges Commission (SEC). A prime example of this is Twitter Founder, Jack Dorsey, who has been a long-term Hodler, and public-back of Bitcoin.
Recently, Dorsey’s latest company Block, launched a self-custodian Bitcoin wallet. Binance Founder and former CEO Changpeng Zhao also known as CZ, has been a big user of the phrase, especially in times of FUD (Fear, Uncertainty, Doubt) as seen above. Get stock recommendations, white label cryptocurrency and bitcoin exchange software development portfolio guidance, and more from The Motley Fool’s premium services. Get step-by-step guidance on how to invest in Tesla stock and learn the ins and outs of this electric vehicle company. It’s been demonstrated that the post’s author made the correct decision.
Crypto winter is the term given to the period when the market is in a slump, with prices plunging significantly lower, or there is a high level of uncertainty in the market. There are several more words that we did not cover in this guide but we are sure you will run into as you interact with other community members. Be observant, keen, and keep an open mind when interacting with other enthusiasts in chat forums and on social media. It is the kind of mindset that will help you learn and contribute more positively to the community.
Crypto pump and dump is an investment scheme in which instigators buy large positions in low-cap (market capitalization) coins or tokens before shilling these assets to other investors. The intention is to create an artificial price increase leading to a substantial profit. The best time to HODL a cryptocurrency is often subjective and depends on various factors, including market conditions, particular cryptocurrencies, and individual financial goals.
This phrase is especially prominent during times of high bearish sentiment or during crypto winters. Some enthusiasts have even accepted HODL as an acronym, meaning to “hold on for dear life.” The term is also related to “diamond hands,” which means that you have an unbreakable grip on the crypto you own. Low cap coins are ideal for pump and dump schemes since instigators do not need to make huge investments to achieve the desired price action. To shill is another common term within the social media circles of crypto enthusiasts which means to selfishly promote a coin or token.
A true believer would always hold on to their tokens, even if markets crash or become extremely volatile. HODLing becomes an ideological belief about the long-term prospects of blockchain technology, cryptocurrencies, and the communities that have formed around them. The term originated from a 2013 online post to the Bitcointalk forum where the typo appeared. The price of Bitcoin in 2013 was volatile at the time, surging to over $950 at the beginning of December, 2013, up from just over $130 in April of the same year. The poster encouraged people not to sell and that they were “hodling” [sic]. HODLing is often seen as a simple and effective strategy, especially for those who prefer to avoid the stress of daily trading.
Also, this is a positive in terms of not requiring the investor to spend too much time on their screen, but there could be short-term opportunities lost as a result. ” or HODL has become a statement every crypto trader and investor has heard at some point in their journey. The phrase, which is an intentional misspelling of the word “hold” has become popular in crypto spaces over the years, and is seen as a sign of perseverance.
Blind faith in a product or idea might seem like a poor quality for an investor — like somebody refusing to sell shares of Blockbuster when Netflix was first on the rise. But according to financial planners and analysts, it’s also a rational response to a market whose ups and downs are exceedingly difficult to predict. The prices of Bitcoin and other cryptocurrencies are notoriously volatile, but HODLers disregard even large price swings. HODLers typically focus on the long-term prospects of digital assets and don’t chase immediate profit.
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Different countries and parties express different attitudes towards the use of cryptocurrencies. It can significantly hinder their role in supporting international transactions, affecting the value of cryptocurrencies. Unfavorable policy-making and public perspective how to buy unibright might drag down the asset value for the long term. The term HODL, which has been in use for a few years, is the article’s main point of emphasis. It may strike you as a misspelling, and you will be right, but within the blockchain space, that spelling is correct.
Is HODL better than trading?
In crypto, the comparable strategy to value investment would be ‘HODLing,’ which works the same way. An investor identifies a project with great potential and invests in it for the medium to long term. As the project rises in popularity and utility, the value of the project’s token also rises. Value investors such as Warren Buffett use this strategy when investing whereby they identify undervalued companies, buy the stocks cheap and hold them for several years.
Hodling sounds a lot like the long-term buy-and-hold strategy The Motley Fool employs in the stock market. Generally speaking, we recommend owning stocks for at least five years. The wealth-building benefits of compound returns make a bigger difference in a longer time frame. The same philosophy should work for high-quality cryptocurrencies as well. It’s essentially the opposite strategy from day traders trying to maximize their cryptocurrency profits on a short-term basis.
HODL Meaning: What Is This Crypto Investment Strategy?
FUD is another acronym that stands for ‘Fear, Uncertainty, and Doubt.’ Part of the reason why cryptocurrency markets are so volatile is that they are vulnerable to public perceptions. Whenever there is negative press coverage, the value of the entire market will fall and the reverse is true. Lamborghini supercars have, for a long time, been used as status symbols by wealthy crypto investors, especially those that can attribute a bulk of their wealth to blockchain-related activities. The first step for a beginner in the blockchain ecosystem is to find out where all the important conversations happen, including social media platforms and chat forums. Next, you should learn the terminology, and part of that is identifying the unique terms and phrases used by members of the community, what they mean and how to use them effectively.