If you are involved in the world of cryptocurrency, then you probably already know all about the slang term ‘HODL’. If you are new, however, you may have recently encountered this word in some form and are not aware of its meaning. Fortunately, if that is the case, you have made your way to the right place!
WHAT DOES HODL MEAN?
It was accidentally created when an online forum post back in 2013 went viral after a bitcoiner tried to say — supposedly drunk at the time — that he would be holding on to his coins. HODL quickly became an official term for not selling your crypto and rather holding onto it as an investment, even when the market dips. Some people have also declared the word an acronym standing for “holding on for dear life”. In either case, the idea remains the same.
That depends on who you ask. Some say you should HODL until your coin is worth a total that you are happy with. Then, you simply sell and take the profits. Of course, there is always a chance that the crypto prices may continue to rise after you’ve sold and you may end up regretting your decision to not wait longer.
Others say you should HODL until your crypto becomes a fully spendable currency. In this case, you won’t need to worry about having to sell it back to fiat anymore. Instead, you’ll simply be able to spend what you have as is. The risk here is that no one can guarantee the future of any crypto and its ability to become a full-fledged currency.
If you had purchased Bitcoin at the very start and HODLed your coins, your profits would be extraordinary. In the 13 years since its inception, Bitcoin has climbed exponentially from US$0.08 to a high of US$58,788. Luckily, many believe that Bitcoin is still in its infancy and you will still be early if you buy now!
HOW DO YOU HODL?
To hodl successfully, patience is vital; you need to be in it for the long run! This means you should buy low and resist the temptation to sell even as you see prices rising.
The safest way to do this is with a hardware wallet. A hardware wallet is a physical device, similar to a USB stick, that holds your crypto private keys offline, eliminating the risk of malware, keyloggers, computer viruses, or other risks that software wallets and exchanges are vulnerable to. Keeping your private keys offline through cold storage is the most secure way to manage your cryptocurrencies.