A person with a HODL compass.
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You lot're scrolling through social media, and you encounter someone saying that they're "HODLING" or telling someone else to "HODL." Confused? Here's what the word means in the world of cryptocurrency and finance—and why it'due south not misspelled.

HODL = Concur

"HODL" is a cryptocurrency-related slang that stands for the word "hold" misspelled. It ofttimes refers to retaining crypto assets that you ain for an extended period, even throughout a highly volatile market motion. "Hodl" is meant to encourage people to not impulsively sell when a cryptocurrency drops dramatically or rises to become highly profitable to sell.

"HODL" too acts every bit an acronym for "Agree on for dear life." You volition often meet the term in various cryptocurrency forums and social media circles. Some influencers even encourage their followers to "hodl" various crypto tokens as part of their long-term strategy.

The Origin of Hodl

The word "hold" has been used in finance for a very long time as part of the purchase-and-hold strategy. This investing method involves ownership a financial asset and property it for an indefinite period of fourth dimension. This is related to the view that an investor should not be swayed by short-term market movements and look to the long-term view.

The term "HODL" originates from a post made in 2013 on cryptocurrency forum Bitcointalk soon afterward a motility by the Chinese government acquired the cost of Bitcoin to autumn drastically inside a day. An intoxicated member typed out a mail service entitled "I AM HODLING" in response, detailing his general lousy luck with investing and his desire to proceed holding onto his assets in the time to come.

Soon later that incident, the term "hodling" became commonplace in the cryptocurrency enthusiast community. It made its way into memes and onto social media and became a way of signaling a token owner'south desire to hang onto their assets.

"Hodl" and Cryptocurrencies

The biggest reason why "hodl" has become such a popular term is the full general volatility of the prices of cryptocurrencies. Many cryptocurrency tokens, even relatively stable ones such as Bitcoin and Ethereum, oft have very volatile market swings. The price of these tokens can autumn 100% one month then rising 300% within the next few months.

Cryptocurrency prices are also prone to the movements of whales (a term for people or organizations that agree a very large amount of a particular token). If even one whale decides to sell a particular token, they could tank the cost entirely.

"HODL" is viewed equally a way to combat these swings in price. An asset-holder who follows the strategy does not sell, fifty-fifty as the market changes. Many people who "HODL" do non fifty-fifty pay close attention to the day-to-day marketplace movement of cryptos, instead preferring to take a long-term view of their tokens.

Why Exercise People "Hodl?"

A pile of Bitcoins
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I of the biggest reasons why people view "hodl" as a viable strategy is their belief in the underlying technology and the use case behind information technology. Bitcoin and nearly other cryptocurrencies are based on a technology called blockchain, which has many uses, including a style to safely and anonymously brand payments over the internet. Some people believe that Bitcoin is the time to come of all financial transactions rather than fiat currencies like Dollars and Euros.

For many cryptocurrency owners, "hodling" is an intriguing prospect. The value of a unmarried Bitcoin has gone from nether a dollar when it first came out more a decade ago to five-digit figures in recent years. Despite high market volatility, many cryptocurrency owners believe in the long-term financial prospects of Bitcoin and other tokens. At the aforementioned time, many other people believe that ownership cryptocurrency is equivalent to gambling.

Many people also believe that the values of cryptocurrencies are better when people buy and do non sell off their tokens. That is why "hodl" is such a well-used term in the community—information technology's often said to beginners who might take fears virtually holding such a volatile asset. "HODL" combats what crypto users call "FUD," which stands for "fright, uncertainty, and incertitude." FUD tin include anything from naysayers to governments to negative presses on the issue of cryptocurrency.

Using "HODL"

"HODL" is generally only used to refer to cryptocurrencies and not other assets. If yous desire to use the term "hodl," reserve it for conversations about these tokens or y'all could be misinterpreted.

If you run into people telling you to "hodl," there'due south a practiced take a chance that you've encountered cryptocurrency enthusiasts. Be sure to use expert judgment in making critical financial decisions, such equally purchasing a cryptocurrency. Never invest more than than you can afford to lose.

If yous want to learn more about cryptocurrencies, first with our guide on Bitcoin.

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