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Hodlers as the Basis of the Crypto Market
The HODL strategy on the cryptocurrency market refers to an investor holding onto their assets despite all events.
I AM HODLING
The term “HODL” is derived from a misspelling by a Bitcoin investor back in 2013 when a post titled “I AM HODLING” was published at one of the forums. What he meant was “to hold”, but Bitcoin supporters enjoyed this misspelling so much that they started using it to denote their faith in Bitcoin’s ultimate success. Hodlers even have a kind of a motto: “Hold On for Dear Life” — hold your assets as if your life depends on it. Putting emotions aside, this strategy is the easiest for the investor: having bought or mined bitcoins or other cryptocurrencies, the investor has to refrain from selling or exchanging it, they just have to hold it in their wallet. But is it profitable?
Historically, being a hodler in the crypto market is quite profitable. Let’s look at Bitcoin as an example and see how its price changed over time. In 2013, when the term was coined, Bitcoin cost $600. In 2014 and 2015, its price plunged by almost two times, but in 2016 it shot up to $1,000 and continued to rise until late 2017 when it reached $20,000. Even now, after Bitcoin price plummeted, it still costs over 10 times more than back in 2013. If we compare the current price of Bitcoin with its launch price, many hodlers are actual millionaires.
Hodlers “hover” behind many cryptocurrencies. For example, hodlers who bought Litecoin before March 2017 when it cost around $3 per coin made a decent buck. By late 2017, the price of Litecoin surged to almost $400. The profit margin was over 100 times. Even if Litecoin costs about $57, hodlers are at an advantage in any case.