The crypto ecosystem has no shortage of jargon. Ambiguous phrases, acronyms and newly formed words that had almost no meaning a decade ago (or even a few months ago for many) are now widely used market signals informing strategic investment decisions. As Cryptocurrencies are natively digital, it is important to understand the vernacular, usage, and meaning of the digital vocabulary that has formed within the space.
HODL- Hold / Hold On for Dear Life
Investing in and trading cryptocurrencies can be stressful. This topic has already been covered on this blog. For many, it may be difficult to even think of a time when trading cryptocurrencies was more stressful, uncertain, or anxiety inducing than today. But the early days of bitcoin, when people still needed the proof that Proof of Work… worked, were an even more challenging environment for investors and traders. The world was still contextualizing the potential of the technology, understanding how it could reach mass adoption, and ultimately, deciding how this could be assigned a monetary value.
Few were as aware of the stresses of early stage crypto trading as ‘GameKyuubi.’ During a bitcoin bear market in December 2013, he wrote (a rather free form post) on the bitcointalk.org forum titled “I AM HODLING.” Despite the countless typos, informal writing style throughout, and admitted intoxication, his message reverberated across the community. For many, his sentiment has been a battle cry that still echoes today.
Traders then and today are constantly speculating on future returns and seeking the highest alpha within their risk profile. Meanwhile, many are not concerned about intraday price fluctuations, rarely checking their portfolio as they wait and see whatever long term value the market assigns. The HODL message resonates with this second group, who then and today recognized the zero sum game of selling a long term investment in a bear market. A passive, wait and see investment approach is the essence of the HODL mindset.
Though not its original meaning, HODL has since been ‘backronymed’ to represent a similar hands off mantra. “Hold On for Dear Life” is the commitment to an asset in the face of adversity, not losing faith in its long term potential during short term periods of doubt. It is keeping that original belief in the potential of decentralization (which motivated them to make that first crypto investment) top of mind. In an industry as nascent as Digital Assets, it can be important for many traders to remain committed to their original motivations and long term objectives rather than attempting to time each market fluctuation. Holding On for Dear Life does still imply a level of risk and uncertainty. But for many, the HODL approach is the belief in and long term commitment to a digitized future.
Daniel Pinto - Market Analyst @ TradingBull.io
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