If you do some crypto currency trading, then many times you must have read HODL or HODLing in the comment forum of many crypto coins. You must’ve noticed that it appeared many times, which clearly means that it isn’t just another typo. What exactly is HODL in the world of crypto currencies? In this post, we will go through the meaning and origins of HODL and clear all your doubts. Let’s get started.
HODL: All You Need to Know
What is HODL?
The full form of HODL is “Hold On for Dear Life”. “HODL” is used only in the context of crypto currency and its meaning is the same as “HOLD”. However, the spelling error made during its first use has made it a special term in the world of crypto currency. HODL in crypto currency is used to signify ‘Strongly believe in crypto’ i.e. buy any crypto currency and keep it with you until you get your favorite gold.
How was HODL born?
HODL originated in 2013 when the price of bitcoin had risen from $ 15 to more than $ 1,100 (in less than 1 year). But in the next 24 hours, in response to reports of a Chinese crackdown, the price dropped 39% and a user (GameKyuubi) on a bitcoin forum posted “I AM HODLING” (yes, misspelled) explaining his decision to keep your position. In less than an hour, HODL became memes all over the internet and today it even makes references to the Game of Thrones character, Hodor. Soon, many people started using HODL instead of HOLD and it became a widespread term in the world of crypto trading.
What is the difference between HODL and HOLD?
HODL and HOLD don’t mean the same thing in crypto currency. HODL means a strong trust and an instruction to hold your crypto coins. On the contrary, HOLD means what you have holdings that you have kept for a short time and after some time you can sell it without any fixed target. Along with the news of social media, there are sudden ups and downs in the crypto market due to the tweets of celebrities such as Elon Musk. It seems then you sell for fear of more loss, but after some time it starts increasing again and increases a lot at which price you are not willing to buy, if you buy then again there is a loss. So if you feel that the market cannot be beaten by trading, then at that time you can use the HODL strategy and save yourself from repeated losses in trading. After some time, you can start trading again.
What is HODLing?
HODLing refers to the action of holding investments despite falls in price. It is also commonly used in the context of investors (“HODLers”) who admit they are not good at short-term trading, but want to have exposure to the price of cryptocurrencies. It can also be used to refer to investors who have a strong conviction regarding a specific currency, and intend to hold their investment for a long period of time.
The HODLing strategy is similar to that of buying and conserving the investment (hold) from traditional markets. Investors who use buy and hold (hold) try to find undervalued assets and hold them for a long period of time. Many investors adapt this strategy to Bitcoin.
What are some other terms used in the world of crypto trading?
- Fear, Uncertainty, and Doubt (FUD):. FUD refers to a strategy that aims to discredit a specific company, product or project, spreading false information about it. The goal is to instill fear and somehow gain an advantage.
- Fear of Missing Out (FOMO): FOMO is the excitement investors feel when they flock to buy an asset for fear of missing out on a profit.
- BUIDL: BUIDL is a term derived from HODL. It usually describes cryptocurrency industry participants who continue to build regardless of price fluctuations.
- Return on Investment (ROI): Return on Investment (ROI) is a way of measuring the performance of an investment.
- All-Time High (ATH): We probably don’t have to explain this one, do we? The All-Time High is the highest recorded price of an asset.
- All-Time Low (ATL): The opposite of ATH, the All-Time Low (ATL) (historical low), is the lowest price of an asset.
- Do Your Own Research (DYOR): It means that investors should do their own research on their investments and not depend on others to do it for them. “Do not trust, verify” is a phrase commonly used in the cryptocurrency markets with a similar meaning.
- Due Diligence (DD): Due Diligence (DD) is somewhat related to DYOR. It refers to the research and care that a rational person or business is expected to undertake before reaching an agreement with another party.
- Anti Money Laundering (AML): Anti Money Laundering (AML) refers to a series of regulations, laws and procedures that aim to prevent criminals from disguising their illegally obtained money as legitimate income.
- Know Your Customer (KYC): Know Your Customer (KYC) guidelines ensure that institutions that facilitate financial instrument trading verify the identity of their customers. KYC goes a long way in preventing money laundering.
So that was some info on the cryptocurrency term HODL and a brief idea about some other popularly used terms in the world of crypto trading. The world of crypto trading is quite enticing but we will leave you with our final piece of advice in crypto lingo. Don’t just invest in crypto because of FOMO. HODL and DYOR. After doing your DD, you can get rid of FUD and start BUIDLing. Good luck!