Hold On for Dear Life to your Cryptocurrency

hold on for dear life crypto currency

Hold On for Dear Life to your Cryptocurrency

The HODL Phenomenon

The concept behind holding on for dear life, or “hodling” is nothing new to the world of invsting, nor is it only applicable to cryptocurrency investing.
You should manage your crypto portfolio as you would any other investment portfolio. The fundamental idea behind hodling is to let the winning trades run because doing so is both the easiest and most certain way to make large returns over time.

At first glance people often assume that hodl is just a typo of ‘hold’. This is partially correct.

The term “hodl” originated during the 2013 December where a Bitcoin investor vented his frustration with a post titled “I AM Hodling”. Here, he explained that only good traders know when to sell Bitcoin and identify bear markets. He also admitted that “Hodling” was a typo.

Hodling has moved on to become a strategy for investing in cryptocurrencies and an abbreviation for “hold on for dear life”. But should you always hold on for dear life or hodl each cryptocurrency?

FUD in the Crypto World

The crypto world moves very fast. So much so, we sometimes refer to “crypto time” as a different scale of time, similar to “dog years” in which there are so many new projects popping up almost daily, price pumps and crashes, and of course media stories promoting FUD (fear, uncertainty, doubt) causing novice investors to panic or at best feel uneasy.

While there is little we can do individually about any of this, having an understanding of these factors and their regularity can pay off for the newbies. They will keep calm and HODL.

Be like Chad HODL, not the Virgin Panic Seller

Prices should continue to be wildly volatile, governments should continue to threaten to ban crypto and then rescind these threats, and new projects certainly will continue to emerge claiming they will dethrone major cryptocurrencies and blockchain projects with their superior technology.
If you truly understand this, you will be able to see through the FUD and be more like the Chad HODL.

Not all coins are worthy of Hodling

Most cryptocurrencies are currently in a price-discovery mode. As the crypto markets are so young and rapidly changing, it’s very difficult to apply standard valuation methods as with equity investments to determine the fair price and whether a coin is overvalued or undervalued.

Instead of having things like price-to-earnings (PE) ratios and discounting cash flows (DCF) as methods to value equities, cryptos are often valued by factors such as:

  • Market Capitalization
  • Max & Total Circulating supply of tokens
  • Use cases and potential for adoption
  • Github repositories and activity
  • Number of transactions
  • Transaction fees & Mining profitability
  • Performance of the blockchain
  • Social media interest (Telegram, Reddit, Twitter, etc.)
  • Google search trends

Whether you’re a hodler or a swing trader it pays to learn about some of these valuation metrics for crypto, as coins that rank well comparatively on these metrics tend to outperform and outlive coins that don’t.

Always remember to think Long-Term & Hold On for Dear Life.

Check out this design on art prints and canvases, accessories, and apparel at the hodl art shop

hold on for dear life crypto currency

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