Crypto seems like a completely different tech space, not thanks to the various weird jargons used by crypto-coiner. For example, have you heard that your NFT friends or cryptocurrency traders 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 are cryptocurrency investors using it?
What does HODL mean in Crypto?
In short, HODL in crypto stands for “Hold on for Dear Life”. In the normal context, it sounds more like an encouragement to someone who is already giving up on life. It’s like saying, it’s not over; hold on.
But this is the meaning of a layman. Simply mentioning HODL to a cryptocurrency investor motivates him to never let go of his digital collections. The “life” you are holding on to refers to a resource, not the soul, as many think.
Therefore, HODL is a common term used everywhere in non-fungible tokens (NFTs) and crypto communities on Twitter and Discord. Cryptocurrency traders often use HODL whenever the market is bearish (a steady decline in the value of an asset).
In crypto, HODL is a self-motivation strategy for investors to show diamond hands (hold on) and withdraw from selling their crypto asset even as its price steadily falls.
For example, when you say something like; Ethereum is bearish, but HODL: You are telling Ethereum investors to avoid hasty selling due to the current steady decline in Ethereum prices. Furthermore, it is a volatile market and could peak overnight.
The origin of HODL: a typo or a deliberate misspelling
Although HODL has taken its place as an acronym, it was not the intention of its creator to include it in the cryptographic dictionary.
The term gained popularity after its unprecedented creator, GameKyuubi, mistakenly spelled “HOLD” as “HODL” in an emotion-driven title from his bitcointalk.org post, “I AM HODLING”. He also agreed that he had written “HOLD” wrong but was unwilling to correct it.
While he agreed that he was a lousy trader who 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 bear market. time, commentators flooded his comment section with the HODL meme.
HODL started out as a downright typo. It has become a meme and has morphed into an accepted acronym that motivates cryptocurrency investors to keep their assets even in a bear market.
Why HODL Cryptocurrency Investors?
So why should a typical cryptocurrency investor HODL? In addition to some metrics, HODL differentiates a dedicated investor from a paper hands one (a fast seller).
Whenever there is a steady decline in the value of a crypto, some traders and investors tend to sell their cryptocurrencies horribly for fear of losing money. You can tell those who refuse to sell theirs despite the drop in HODL value.
Using HODL does not result in a decrease in value in some cases. It could also express high hopes for the future of a new project. You could also use it during a bull market (a steady rise in market value). More seasoned investors tend to HODL during a bull market with the hope that it will rise further in the future.
For example, some investors have decided to HODL with their Bitcoin despite its all-time high, up to USD 65,000 in 2021. Those with diamond hands are still HODLing today, despite the Bitcoin price falling from that high.
Therefore, investors use HODL as a symbol of loyalty to a project. While it might come to mind in worst-case scenarios, crypto-coiners might decide to HODL with a cryptocurrency or NFT, be it promising, successful, or blatant that is likely going down the drain. So it has its contextual use case in both bear and bull markets.
The next time you see HODL in a statement, think of it as “holding on to hope,” an expression of hope that a project looks promising and will greatly increase in value over time.
Learn to HODL: Knowing When to Let Go
There are many projects based on cryptocurrencies today. Some are already successful or look promising, while others have little or no potential value. But regardless of the reason, if you’ve been hiding an NFT or cryptocurrency in your wallet for months, you’ve probably been HODLing.
Always remember that the success of a crypto project is highly dependent on its adoption rate and the number of people investing in it. With that in mind, do your research on a project before you sell or decide to HODL.