What is HODL? How does HODL work? What does that abbreviation even mean?
What does HODL consist of? How is HODL related to the cryptocurrency of the world?
Can you buy and keep HODL when investing? Is there a way to monitor sales and retain HODL? How long do you need to keep your HODL? How and in what way to invest in HODL?
Explanation and origin of the term HODL
The term HODL originated from the misspelled word hold, and as such has been retained and remained. It’s an acronym. Since it represents the word hold, the abbreviation refers to the term “hold on for dear life” and hence the term HODL.
The term came in 2013 when the word hold was misspelled in a tweet, urging them to keep holding on to certain cryptocurrencies and not sell them despite all the possible ups and downs of the stock market.
This misspelling of the word hold is grammatically incorrect at first glance, which many professors and teachers do not support. However, a grammatical irregularity is justified in this term, since the term HODL is an abbreviation for the saying “hold on for dear life” and only when you know that, only then do you understand the true meaning.
The term HODL represents the concept and strategy of buying or retaining any type of cryptocurrency, in the belief that existing currencies will be gradually replaced by cryptocurrencies.
This is one of the most popular tactics for buying cryptocurrencies at the moment because it is simple and you do not have to keep track of what is happening with your currency because you are essentially keeping them.
Now that we have mastered the meaning and origins of HODL it is time to get into the depth of meaning of what HODL actually means in the crypto community.
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How does HODL work?
There are three types of investments when trading cryptocurrencies, you trade them, you stock them or you HODL them.
HODL is one of three types of investments in which individuals can buy cryptocurrencies, NFTs and hold them for longer periods, giving investors the advantage of increasing asset value.
HODL is long-term ownership, which means that you do not plan to make quick money but to observe the market and wait for a favorable moment for you to sell them or continue to keep them.
The opposite of HODL is short-term trading. What does that mean?
Investors in this case try to buy at very low prices, keep them until the prices increase to the amount invested or more. After that, they try to sell them to be able to return the invested capital or earn multiple times on them, it all depends on the market.
HODL is considered one of the safest investments, as once purchased, it is retained for as long as the owner wants it. Although the goal is to never sell, no matter how much the price falls or rises, the goal is to own and HODLing.
Reasons for investing in HODL
Reason One: Long – term gain
One of the most important items in this type of trading and investing is patience as well as not being burdened with the outcome. Very few people have that patience and do not get panic attacks when price drops, because they understand the market and that prices have to go up and down.
We can take the example of Bitcoin and SOL tokens, the value of which was initially very low, but over a period of time, the price of SOL tokens increased by 10,000% in just one year.
Bitcoin reached its highest price in 2021, although before that there was a drop in the price on several occasions. When the price of Bitcoin began to fall on a couple of occasions through 2021, people began to panic.
After some time the price of Bitcoin began to rise, and most began to sell their Bitcoins to save at least part of the money invested. In a few months, the price would jump sharply to the highest value of Bitcoin, $ 70,000.
Those who were apprehensive and impatient lost a large sum of money in a few days or months.
What does this tell us? That it is better and wiser to wait, although it sounds easy, is not because you need a lot of patience for this type of investment.
Reason Two: Creating wealth for future generations
If you are planning HODL cryptocurrencies, your family can get rich in the future based on what you have invested in the present.
Your family will be able to transfer assets to the next generation. That way, your family will have the authority and ability to use your HODL portfolio. This in a way represents a legacy and a good plan for the future.
You need to be aware that this type of investment goes to long-term profit, is retained, and is not sold under any circumstances.
One of the generations that is aware of this is millennials and that is why they choose HODL as a type of investment.
Conclusion
One of the rules when investing is not to lose your money. So it is better to own an investment and wait for the right moment for sale than to lose money.
We advise you to inquire about all the details related to your interests, company, stock market, cryptocurrency, and everything you need to know before you decide on the next move.
Think carefully before choosing a particular type of investment because you need a lot of patience and waiting.
