HBO’s Game of Thrones Character Hodor Stars in eToro’s Crypto Term HODL Commercial
Although it was originally misspelt, the term HODL is now popular among crypto investors. In fact, it is one of the key long-term trading strategies for traders in the crypto space.
What is HODL?
HODL stands for ‘Hold On for Dear Life.’ Essentially, it is a phrase meant to encourage crypto investors when their assets are plummeting in value that they will eventually rise again when mass adoption is realized. Therefore, the investors should hold on and void selling, regardless of the pressure.
HODL was first used in the crypto space on a Bitcoin Forum in December 2013 by a user called GameKyuubi. Back then, the price of Bitcoin had fallen from $716 to $438 in one day after a crackdown on cryptocurrencies by the Chinese government. GameKyuubi indicated that they would not sell their Bitcoin despite the nosedive by typing ‘I AM HODLING.’
How HODL became an Investment Strategy
As a result, many internet users created memes based on the rants in the Bitcoin Forum mentioned above. In due course, the term HODL gained traction amongst crypto investors. In 2017, it was described as the willingness to persist with Bitcoin investments even when the market is experiencing a bearish trend.
Throughout history, there are several instances where HODLing would have been the best strategy. For example, Ronald Wayne, the third co-founder of the Apple Corporation, should have HODL instead of selling his 10% stake on the tech giant to Steve Wozniak and Steve Jobs for a paltry $800.
In August, Apple became the first company to attain a market cap value of $1 trillion. If Wayne had HODLed, he would have a $100 billion stake in the company.
Shortly after its IPO, the price of Amazon shares dropped from $18 to $1.5, prompting many investors to sell their stake. Currently, one Amazon share costs $1,700.
HODLing Digital Currencies
The future may be unpredictable, but most crypto advocates believe that the value of this asset class will soar once the industry is fully mature and there is widespread mass adoption. Specifically, the enormous potential of cryptocurrencies and blockchain technology makes this projection practical.
It is expected that these two will revolutionize several facets of the global economy, including governance, voting, trade, and so on. Nonetheless, all crypto proponents acknowledge that the technology is still in its early stages and there is a long way to go.