If you’ve researched cryptocurrency, you’ve encountered the word “hodler.” Initially, you may have even laughed at the person who misspelled “holder” before realizing the unusual spelling was intentional.
So how did “hodler” become a common crypto term, and what does it mean? Read on to find out where this term originated from, and why it is so important.
What Does “HODL” Mean?
Put simply, “HODL” means hold. To hodl is to hold onto cryptocurrency, despite the sharp increases and decreases that occur. While the term “hold” has been used in the stock and finance industry for years, “hodling” has only been around for 8 years. This is also referred to as “holding on for dear life,” though the acronym came after the word was coined.
The History of HODL
The term originated on a Bitcoin forum in December 2013 when forum member GameKyuubi drunkenly declared: “I AM HODLING.”
At the time, Bitcoin had plunged 39%, from $716 to $438, and many Bitcoin owners were selling out of fear it would continue to plummet. GameKyuubi laid out his semi-coherent reasons for the opposite strategy, noting his previous bad luck with trying to time the market.
In that same post, he acknowledged the “hodling” typo and also admitted to drinking whiskey beforehand–before debating if the word should be spelled “whisky.”
GameKyuubi’s forum post has been read almost 800,000 times since then, solidifying the term “hodl” into crypto lingo.
Why “HODL” is Still Around
Hodling is still around because of belief in the vision, and memes.
At the heart of the hodl mindset is an unwillingness to give up or give in. Those that hodl indefinitely believe that crypto will become the new financial system. They will hold their crypto until that happens, or until the bitter end. Additionally, the term quickly went viral with Braveheart and 300 memes. Then a Matrix meme appeared and countless others. But the original is a meme from 300, showing King Leonidas declaring that he will hodl!
How to HODL
In crypto, many have watched as millions in value are wiped off their account in days, only for it to return even stronger. Some hodl until they have enough for a lambo, but most hodl indefinitely. The advantage to this strategy is its simplicity. You rarely have to check the market because whether it is up or down, you will just continue to buy and hodl. That is recommended because you may be tempted to sell when looking at sharp declines or inclines. If you want to hodl, you have to disconnect from how the market is moving, and stay focused on the future.
The hodl strategy is simple in concept, but can be difficult to carry out. To become a hodler, here’s what you need to do:
- Buy crypto
- Don’t sell
There are nuances in how to do this most effectively. However, this simplicity is at the heart of the hodl strategy.
In order to hodl, you have to have crypto to start with. As with any other investments, only buy crypto that you understand. There are major differences between the value created by even the two largest cryptos, Bitcoin and Ethereum.
When buying crypto, you have two options. You can use lump sum investing, or dollar cost average. Lump sum investing means you’re making one large investment at one point in time. Dollar cost averaging (DCA) is all about consistency. With DCA you make modest investments consistently across long periods of time. This reduces your risk while still exposing you to the massive gains of crypto and stocks.
Choose the investment strategy that works for you and your goals. The most important point is to buy crypto.
Don’t Sell (until the time is right)
Now that you have crypto, here’s what you need to do: nothing. As a true hodler, you keep your crypto during the good times and bad. But if you never use your crypto, what’s the point? We recommend picking one of these two goals when hodling to give yourself a timeframe.
As a Bitcoin optimist (also called a Bitcoin maximalist), you believe that Bitcoin and crypto are going to make the traditional financial systems fade away. With this belief, you want to be part of the movement, and also hang on to Bitcoin as it becomes a primary global currency. With this type of goal, you would hold your crypto indefinitely. The crypto in your wallet is your ticket to the new age of finance.
Select a Goal
The second option is to set a specific number to achieve with your crypto investments. Maybe you want to travel, or buy your first lambo. Whatever your goal may be, write it down and find the amount you need. Once you pick your number, you need to steadily buy crypto and do not sell until you hit that goal number.
Once you hit your target, congratulations! You’re a professional hodler that has overcome the ups and downs of the crypto market. Now go enjoy that vacation!
Example of Hodling Done Right
The Winklevoss twins, known for being pro-Bitcoin and anti-Mark Zuckerberg, announced in August 2013 they owned $11 million in Bitcoin. Although they didn’t specify how much Bitcoin they originally purchased, they mentioned their first purchase was in the summer of 2012 when its value was in the single digits.
In August 2013, a single Bitcoin was worth about $265. If the twins had $11 million BTC, that means they owned 41,509 bitcoins at that time. Let’s guesstimate that their summer of 2012 Bitcoin purchase was in July of 2012 when one bitcoin was worth $7. Buying 41,509 bitcoins at $7 equals $290,566.
Days after the Winklevosses announced they owned $11 million in Bitcoin, the cryptocurrency dropped from $265 to $120 a coin, reducing their $11 million to about $5 million.
But like true hodlers they not only held/hedl steady but bought more. Now that initial investment is worth around $2 billion.
Your Turn to HODL
Become a cryptocurrency hodler today! Create your Coinsource account to buy crypto with cash.
Remember to buy consistently, keep your eyes fixed on your goal, not the daily market moves, and hold on to your crypto!
Coinsource is the world leader in Bitcoin ATMs. With a focus on compliance and ease of use, Coinsource is aiming to bring Bitcoin to the masses. Follow for blogs about Bitcoin, finance, company updates and Bitcoin ATM information!