A popular crypto trader started the ‘hodl’ meme in 2013. This meme quickly spread throughout the crypto community. Users started using this in various forms on social media, such as ‘I am a hodler’, ‘hodling my crypto’, and others. The HODL crypto investment strategy is when investors decide to hold on to or not sell their cryptos even when prices rise or fall.
Some crypto enthusiasts have even accepted an acronym for HODL, meaning “ hold on for dear life”. Crypto users use this acronym to encourage others to not sell when prices fall.
The HODL investment strategy has been rewarding for long-term investors in leading cryptos such as Bitcoin and Ethereum. This strategy has helped many investors navigate the volatility of the crypto market. The HODL crypto community encourages other users to not cash out when prices rise or fall.
Read more: What is Ethereum
How to HODL Crypto?
The investment decision on when to hold or sell crypto is a personal choice, and crypto investors should research before making these decisions. Some crypto investors use the HODL strategy across their portfolio and add crypto tokens without selling them for months or years.
HODL is a good investment strategy for those users who believe in the long-term value of crypto tokens. The crypto industry is still new, and many factors affect its tokens’ prices. Factors such as world events, research and development, adoption rates and others can affect crypto prices. HODLing can help one navigate through a volatile market and ensure that investors are not prone to market timing errors.
How Long Should I HODL Crypto?
Some investors HODL-specific crypto tokens while trading other crypto tokens for which they do not see the growth potential. Most HODL crypto tokens are established but HODLing a crypto token with a low market cap can result in profits if it grows significantly over time.
The HODL investment strategy may be a good choice for investors who do not want to spend time on their crypto portfolio. It is always good to diversify your crypto portfolio, and there are thousands to choose from. Do your research and gain knowledge before you invest in cryptos or use the HODL investment strategy. The period you should hold your crypto assets depends on your investment goals and risk tolerance. Crypto investors need to make sure their holdings are as secure as possible if they plan to hold their crypto assets for a long time.
Should I HODL Crypto?
The HODL investment strategy has its limits. Crypto investors using this investment strategy should have clear goals and monitor market events to mitigate risks. The concept of investing in assets for long-term gains is not a new investment concept. This investment strategy is popular in the stock market, where investors put money aside for the foreseeable future rather than trying to time short-term peaks and falls. This strategy can seem quite appealing, especially in crypto, as the market volatility is more.
Conclusion
It can be difficult for crypto traders to time short-term market movements. New investors can use the HODL strategy to start their investment journey. Investors should be aware that the HODL strategy may not be the correct method for all cryptos.
Crypto investors should sell and cash in on some gains when their goals are met, but HODL can be a good default option. The HODL investment strategy can be a sensible choice when combining it with thorough research on the long-term prospects of crypto tokens.
You can buy ETH and 100+ other cryptos through ZebPay.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The views, thoughts, and opinions expressed in the article belong solely to the author, and not to ZebPay or the author’s employer or other groups or individuals. ZebPay shall not be held liable for any acts or omissions, or losses incurred by the investors. ZebPay has not received any compensation in cash or kind for the above article and the article is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.