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Like any other investment sector, the crypto industry has a vocabulary you should learn. Learning how and when to use some terms, mainly when trading your Bitcoin, is essential. If you have just ventured into Bitcoin investment, you will likely encounter HODL. HODL is among the significant vocabularies that have existed for a long time. GameKyuubi, a Bitcoin investor who wanted to communicate his decision to hold Bitcoin when the prices went down, initiated the term HODL. The term evolved from ‘Hold’ to ‘HODL’ to denote Hold on For dear Life. His idea was to avoid losses by selling out his bitcoin when the prices plummeted. Since then, the term HODL has become a signature in Bitcoin investment.
Market movements and trends are vital in directing investors on how to invest in their Bitcoin. Through thorough analysis, it is possible to determine when to hold or sell your Bitcoin. The bottom line is that you must uphold the goal of investing your Bitcoin, which is making profits. So, if you are planning to trade Bitcoin, you may want to use a reputable trading platform like bitcoinrevolution-dk.com
What is HODL, and How Does The Term Apply?
One of the main concerns among novice Bitcoin investors is that they make uninformed decisions hence making losses or minimal returns. And this is one of the reasons new investors require guidance on applying the right strategies toward generating reasonable profits. The advent of the term HODL was when GameKyuubi wanted to inform individuals to make the right decision by holding their Bitcoin token when the prices were recessive. The word was well-intended since it was a market indicator that keeping Bitcoin when prices are unfavourable is an effective strategy.
Based on the high and notorious volatility of the crypto industry, strategic decisions are necessary. In this case, there are times when Bitcoin may turn bearish, and other times it might turn bullish. The bear session means the prices plummet significantly, making it hard to make profits. However, a significant increase in the price of Bitcoin marks bull sessions. In this case, HODL applies when individuals fear selling out their Bitcoin due to possible losses. Aside from that, some individuals refrain from selling their Bitcoin even when the prices are lucrative. Either way, HODL applies because Bitcoin tokens remain under personal or corporate reserves and are not in market circulation.
From a psychological aspect, the term HODL can denote the possibility of either gaining or losing amidst the high volatility rates. In this case, there is the opportunity to make money through short-term trading and the possibility of losing money even in long-term holding should Bitcoin trends turn unfavourable. Therefore, applying HODL can connect to psychological perception and the intended goals of the investors.
Notably, the HODL strategy has made huge returns, especially for individuals who purchased and held Bitcoin at its early stages in the market. The first HODL forum was conducted in 2013, after which Bitcoin grew by 2500% by 2018. And this implies that the correct application of the HODL strategy can yield high gains.
Conclusion
Buying and holding Bitcoin is a strategy that requires an investor to wait for the value to appreciate to make profits upon selling the holdings. And this was the initial idea when HODL came into existence. Today, investors and traders apply this strategy and profit significantly within a certain period. With the right tools and analytics, the HODL strategy is likely to multiply your Bitcoin investments fast.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency trading involves high risk, and is not suitable for all investors. Before deciding to trade cryptocurrencies, tokens or any other digital asset you should carefully consider your investment objectives, level of experience, and risk appetite. TaxGuru does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions. By the use of the above information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.
