Brief Introduction

HODL refers to the strategy of firmly holding a cryptocurrency for a long time and never selling it, regardless of whether the coin price rises or falls. This term comes from an article on Bitcointalk, a Bitcoin forum in 2013. A user named GameKyuubi told everyone to hold on to Bitcoin when facing severe price fluctuations. Because he was too nervous or emotional, he accidentally mistakenly wrote “Hold” as “Hodl”, but accidentally caused the echo of the online community.

Nowadays, Hodl has become a widely used slang in crypto space. Many meme pictures and lines have emerged one after another, becoming one of the characteristics of the crypto space culture. People later reinterpreted the word Hodl as the abbreviation of “Hold On for Dear Life” to express their belief in cryptocurrency for life.

Historical Origin

In the early days, the price of cryptocurrency fluctuated extremely violently. People felt love and hate for this market, which operated 7x24 service throughout the year and had no limit on rise and fall. The waterfall-like slump and parabolic rise were stirring people’s emotions all the time.

On the morning of December 18, 2013, the price of Bitcoin plunged, with a one-day decline of 36%. A user named GameKyuubi published an article entitled “I AM HODLING” on Bitcoin forum Bitcointalk, which was full of all kinds of typos and complaints, including his girlfriend who dumped him, the Bitcoin crashed, admitting that he was a bad trader, failed to sell immediately, and planned to hold on to his Bitcoin until the bull market came, alleviating the sorrow by drinking, and so on. Between the lines, there was emotional excitement and his true thoughts.

The huge decline of the day obviously broke the hearts of many people. The emergence of this article resonated with people, and they began to rush into the forum to leave messages to keep warm. They all stated that they would also start the Hodl journey to respond. Various meme stickers and emojis have sprung up, and this term began to ferment and become popular on the Internet. Since then, whenever the price of Bitcoin collapsed, people would use the word Hodl to encourage each other and considered the abbreviation of “Hold On for Dear Life”. No matter what happens, they should stick to Bitcoin.

Significance of Investment and Financial Management

Looking back at the price history of Bitcoin, the price increase and return on investment in the past ten years are so amazing that the term Hodl is widely praised in the cryptocurrency community. However, the origin of Hodl’s strategy does not derive from cryptocurrency. This investment method, called “buy-and-hold strategy”, has long existed in traditional financial markets. It ignores short-term financial market fluctuations or recessions and focuses only on long-term growth and yield.

The buy-and-hold strategy is a passive investment method, which requires no other operations. It can only be held after purchase, that is, only buy but not sell. It is usually matched with other investment methods such as dollar cost averaging. In this case, investors usually buy blue chip projects in specific fields or index ETFs linked to the market. The logical thinking behind the buy-and-hold strategy is that the financial market is generally developing upward for a long time, so investors can enjoy the dividends of economic growth by simply buying mainstream investment targets.

Not all cryptocurrencies apply the Hodl strategy. In fact, only a few cryptocurrencies can survive in the market after multiple bull and bear market cycles, and maintain their price growth trend. As the leader and weathervane of the cryptocurrency market, Bitcoin itself has the characteristics of a large ETF index. Although the Bitcoin dominance index has fallen from more than 90% of the market share to approximately 40% in the past 10 years, investors buying Bitcoin means they are investing in the entire cryptocurrency market and are optimistic about the long-term future development trend.

Community Influence

Hodl not only attracts a lot of people in the cryptocurrency community, but also is the source of many ideas and thoughts. Within ten minutes of GameKyuubi’s posting, a meme picture of lines adapted from the stills of the movie “300” appeared in the community, and then many deliberately replaced English typos such as Sodl, BUIDL, SAFU and WEN also emerged one after another, forming an interesting typo culture in crypto space. People use confusing sentences to tease each other on the Internet. On the other hand, they also seek a little laughter and encourage each other in the up and down market, as if everyone had telepathy, condensing a community atmosphere that can communicate without correct words.

The first meme picture of Hodl is adapted from the film “300”

In the message string at the bottom of GameKyuubi’s article, users can see many memes and deliberate typo creation.

The popularity of Hodl in crypto space has also brought business opportunities, and relevant surrounding goods, services and advertisements have also been launched one after another. In the advertisement of cryptocurrency investment, eToro, a social financial investment platform, vividly depicts the uneasiness of investors in the face of the decline of Bitcoin and the debate with people in the online community. Twitter creator Lina Seiche also drew a series of comic works of “The Little HODLer” on the Internet, interpreted the current market situation and personal Bitcoin support from different angles, and sold physical puppets based on comic characters. In addition, some cryptocurrency news media even named their platform website “The Daily Hodl” in the name of Hodl, which shows the influence of the word Hodl on the cryptocurrency community.

The accessory: The Little Holder

What kind of person is suitable for Hodl?

In the cryptocurrency world, it is not easy to successfully Hodl currency. First of all, you must have a unique insight to find the gems that have not been explored in the vast crypto sea. Only cryptocurrencies with value growth potential can have the value of Hodl, because most currencies will wither in the bear market, and Hodl will only evolve into a permanent hold in the end. In addition, even mainstream currencies such as Bitcoin and Ethereum, which have gone through the cold and summer, are still prone to 80% to 90% high points when the market is extremely pessimistic. Without a firm belief in cryptocurrency, it is easy to give up because they can’t afford floating losses on their books.

Not Only Slang, But Also a Trend

Hodl is not limited to the slogan of online communities. In the years of the development of cryptocurrency, the ideology of only buying but not selling Hodl Bitcoin has been deeply rooted in the hearts of the people. Someone on Glassnode, a on-chain data analysis website, has made an index called “Bitcoin: HODL Waves”, which specifically counts the time period of storing Bitcoin in different wallets. As of the writing time, Bitcoin has just experienced an unprecedented decline for 9 consecutive weeks and the largest decline in a single month, but the number of wallets that have long held Bitcoin has increased instead of decreasing, which shows the firm belief of people Hodl bitcoin in crypto space.

The Hodl Wave of Bitcoin has become an important belief supporting the people in crypto space

Conclusion

The word Hodl has been transformed into a representative culture in crypto space from a miswritten online forum article at the beginning, carrying the ideology of many community members, and also producing many interesting meme pictures and commodity advertisements. Hodl is also an investment and financial management strategy. Investors can use the strategy to continuously buy and hold without fear of fluctuations in market prices, and take a long-term view of income growth. However, not all investment targets are suitable for Hodl, and not everyone can accept the long-term losses that Hodl strategy may encounter in the face of economic changes. The cryptocurrency market price changes extremely rapidly and violently. Although the Hodl wave of Bitcoin continues unabated in the cold winter of the downturn, investors still need to know their own risk tolerance range and understand the investment cryptocurrency in detail before deciding whether to join the Hodl team together.