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By Staff Reporters
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In the cryptocurrency world, people who HODL are usually inexperienced traders but who have a lot of faith in the future of Bitcoin. These traders believe that one day, Bitcoin will become a mainstream currency with a six-figure value. That is why they can’t risk losing any of their investments for short-term trading gratifications. These traders argue that given Bitcoin’s limited supply, the price will always rise as fewer and fewer coins remain in circulation and more investors and institutions recognize it as a store of value.
In a nutshell, HODL is now used to describe an investing strategy where investors are discouraged from trading based on short-term price swings. The approach basically stems from the rationale that inexperienced traders are more likely to lose their investment in short-term trading since they cannot correctly read and interpret vital signals. The safest approach for them, therefore, is to simply HODL and wait until their investments become highly profitable when the price goes up. Hodling can also help traders avoid two common mistakes in the cryptocurrency market. These are:
- The Fear of Missing Out (FOMO) that can cause traders to buy high
- Fear, Uncertainty, and Doubt (FUD) that can cause traders to sell low, also known as SODling.
Hodlers believe that cryptocurrencies will someday supplant fiat currencies and become insanely valuable. They, ideally, do not believe in exchanging cryptocurrencies for traditional money.
There is one popular meme that perfectly captures this maximalist philosophy. The meme is a satirical version of the Matrix Movie where Neo asks Orpheus “ “What are you trying to tell me, that I can trade my bitcoin for millions someday?” and Orpheus responds, “No Neo, I’m trying to tell you that when you’re ready … you won’t have to.”
That, according to Hodlers, means that a time will come when you won’t have to sell your Bitcoin for fiat money because there won’t be any fiat money but only Bitcoin.
READ MORE: https://trading-education.com/what-is-cryptocurrency-hodling
CITE: https://www.r2library.com/Resource/Title/082610254
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Filed under: Glossary Terms, Health Economics, Information Technology, Investing | Tagged: crypto HODL, HODL, HODL strategy | Leave a comment »
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