Crypto seems like an entirely different tech space, no thanks to the various strange slang used by crypto-coiners. For example, have you heard your NFT or crypto trader friends use the term HODL? If not, you’ve probably seen it on Twitter or other social media.
What exactly does HODL mean? Where does it come from, and why do crypto investors use it?
What Does HODL Stand For in Crypto?
In short, HODL in crypto is an acronym for “Hold on for Dear Life.” In the regular context, it sounds more like an encouragement to someone already giving up on life. It’s like saying, it’s not over; hang in there.
But that’s a layman’s meaning. Mere mentioning HODL to a crypto investor motivates them to never let go of their digital collections. The “life” you’re holding on to refers to an asset, not the soul, as many think.
Therefore, HODL is a common term used all over the place in non-fungible token (NFT) and crypto communities on Twitter and Discord. Crypto traders use HODL often whenever the market is bearish (a steady decline in an asset’s value).
In crypto, HODL is a self-motivation strategy for investors to exhibit diamond hands (hold on tight) and pull back from selling their crypto asset even if its price declines steadily.
For instance, when you say something like; Ethereum is bearish, but HODL—you’re telling Ethereum investors to avoid selling hurridly due to Ethereum’s current steady price decline. Besides, it’s a volatile market and could peak to the moon overnight.
The Origin of HODL: A Typo or Deliberate Misspell
While HODL has taken its place as an acronym, it wasn’t its originator’s intention to push it into the crypto dictionary.
The term gained popularity after its unprecedented originator, GameKyuubi, mistakenly wrote “HOLD” as “HODL” in an emotion-driven title of his bitcointalk.org post, “I AM HODLING.” He further agreed he misspelled “HOLD” but was unwilling to correct it.
Despite agreeing he was a bad trader that would rather hold than sell, his post came out of his heart as an attack on every investor selling their asset during the December 2013 Bitcoin bearish market. In no time, commenters flooded his comments section with the HODL meme.
HODL started as an actual typo. It became a meme and morphed into an accepted acronym that motivates crypto investors to hold on to their assets even in a bearish market.
Why Do Crypto Investors HODL?
So why would a typical crypto investor HODL? In addition to a few metrics, HODL differentiates a dedicated investor from one with paper hands (a quick seller).
Whenever there’s a steady fall in a crypto’s value, some traders and investors tend to sell their cryptocurrencies horridly for fear of losing money. You can say those refusing to sell theirs despite the value decline HODL.
Using HODL doesn’t translate to a fall in value in some instances. It might also express high hopes for a new project’s future. You might even use it during a bull market (a steady rise in market value). Most experienced investors tend to HODL during a bull market with the hope that it’ll climb further in the future.
For example, some investors decided to HODL with their Bitcoin despite its all-time high, up to 65,000 USD in 2021. Those with diamond hands are still HODLing today, despite Bitcoin’s price falling since that high.
Thus, investors use HODL as a symbol of loyalty to a project. While it might come to mind in worse scenarios, crypto-coiners might decide to HODL with a cryptocurrency or NFT—whether promising, successful, or glaring that it’s probably going down the drain. So it has its contextual use case in both bearish and bull markets.
The next time you see HODL in a statement, think of it as “holding tight to hope,” an expression of hope that a project looks promising and will rise significantly in value with time.
Learn to HODL: Know When to Let Go
There are many crypto-based projects today. Some are already successful or look promising, while others hold little or no potential worth. But, no matter your reason, if you’ve stashed an NFT or a cryptocurrency in your wallet for months, you’ve probably been HODLing.
Always remember that the success of a crypto project depends heavily on its rate of adoption and the number of people investing in it. With that in mind, do your research about a project before selling or deciding to HODL.
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