What Does HODL Mean?
HODL, a misspelled version of hold, is a term used in the cryptocurrency world that refers to a buy and hold approach toward various cryptocurrencies.
There’s a story behind HODL, which explains its existence. Back in 2013, in a bitcointalk forum post, a discussion was brewing over whether people should sell or keep their Bitcoin.
The reason was because Bitcoin had skyrocketed over the course of 2013. In those twelve months Bitcoin went from less than $15 to over $1,000. Then December 18, 2013 happened. According to CoinDesk’s price index for Bitcoin, it only took 24 hours for the price to fall from $716 to $438, or 39%.
It was at 10:03 a.m. UTC, that same day, that the phrase was born. A user by the name of GameKyuubi posted the infamous phrase, “I AM HODLING”. It was a part of a rant filled with typos and booze about how he was going to hold his Bitcoin to counter his horrible trading skills. It’s a rant so good you have to see it to understand.
“I typed that tyitle twice because I knew it was wrong the first time. Still wrong. w/e”
he wrote in reference to the now-famous misspelling of “holding.”
“WHY AM I HOLDING? I’LL TELL YOU WHY”
“It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro.”
In case you didn’t catch that, GameKyuubi had some wisdom despite his booze-filled condition. He knew he’d make the wrong decision if he tried to constantly buy and sell as other day traders do.
So instead, he resorted to simply holding his Bitcoin and taking the long game approach. He explains more in his rant, “You only sell in a bear market if you are a good day trader or an illusioned noob. The people in between hold. In a zero-sum game such as this, traders can only take your money if you sell.”
It wasn’t long before HODL memes began to take over the crypto community. Initially they were memes from the movies 300 and Braveheart. Since then, the memes are endless.
The HODL Approach
Now, HODLING refers to a philosophy or entire approach to trading cryptocurrencies. The idea is simple. Beginning traders are going to mess up their market timing and trading. But they can keep their assets if they simply hodl onto them and weather the storms.
For the extreme cryptocurrency loyalists, HODLING isn’t just about making the smart investment decision. Some truly believe that crypto will one day replace fiat currencies. For this crowd, HODLING has a very real meaning because they see market exchange rates as irrelevant.