What does HODL mean and where did it start?

(Last Updated on February 20, 2021)

The term HODL is thrown around a lot in crypto communities because it has become the highest success investing philosophy for Bitcoin.

Many claim it means “hold on for deal life” and other such phrases, but the true story is a simple typo with whiskey to blame!!

Meaning of HODL = holding your Bitcoin long term for high returns by avoiding short term volatility and temptations of trading

How did the term start?

Typo of “hold”.

The term was born from a BitcoinTalk.org forum post where the user GameKyuubi was losing all his Bitcoin trying to trade “like a pro” and realized in his drunken stupor it is best to just HODL! Trying to trade crypto in any high frequency should be left to the professionals. It is really frustrating seeing all the “pros” make profitable trades while you flop and fail at timing bottoms and tops. It is extremely difficult to day trade, especially in Bitcoin, and you often end up with much less Bitcoin than you started with.

It is better to HODL long term!

The longer you hold onto your coins, the more value they accrue.

Here is the legendary BitcoinTalk forums post by GameKyuubi -> https://bitcointalk.org/index.php?topic=375643.0

GameKyuubi unknowingly and DRUNKENLY created the best Bitcoin investment strategy of all time called, “Hodling”

It all started from the angry, drunken ramblings of an early Bitcoiner that quickly realized trading isn’t for him!

I type d that tyitle twice because I knew it was wrong the first time.  Still wrong.  w/e.  GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY.  It’s because I’m a bad trader and I KNOW I’M A BAD TRADER.  Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro.  Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what?  I’m not part of that group.  When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~!  Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT.  NO SHIT I SHOULD HAVE SOLD.  I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU.  You only sell in a bear market if you are a good day trader or an illusioned noob.  The people inbetween hold.  In a zero-sum game such as this, traders can only take your money if you sell.

so i’ve had some whiskey
actually on the bottle it’s spelled whisky
w/e
sue me
(but only if it’s payable in BTC)

GameKyuubi

What are the key principles to take away from @GameKyuubi wisdom??

1. You suck at trading!

Yes, most people are terrible traders for a million different reasons. The majority of the time you are going to lose money trading cryptocurrencies due to poor timing, crazy volatility, emotions, no stop-loss, over leveraged, etc etc.

2. The more you trade, the more your lose – read rule #1

The more you try to trade in the market, the more you compile losses and fees on exchanges. Things happen very fast in crypto and the markets are open 24/7/365 – are you always ready for drastic volatility and changes in market cycles?

3. Investors should not be emotional – read rule #1

If you are not convicted in your trading plans – do not trade Bitcoin. The volatility, the FUD, and everything else going on will stress you out and break you down making you sell for losses. Don’t have weak hands. Form a well prepared investment plan and stick to it.

Holding long term is the best investment advice for 99% of people who enter Bitcoin.

Solid follow up post by the man himself

It is a simple investment strategy = believe in Bitcoin, buy when you believe it is cheap, and have a low time preference.

Dollar cost averaging all the time works well especially since you have a period of years to enter the market and are unsure of what prices will be. DCA will allow for you to average out those early investment years and reap the profits down the road. You will compound some great value as Bitcoin is far below “all time highs” the majority of its trading days.

BitMex made it ABUNDANTLY clear that many of us should JUST HODL!

Over leveraged trades + standard Bitcoin volatility = many liquidations

You think 100x is a good idea? Super day trader??

Don’t get liquidated trying to get rich quick off a 100x gamble

99% of beginner “crypto traders” enter into over leveraged, margin trading and get REKT.

Over leveraged gamblers cannot survive 30% daily candles in the Bitcoin market

The noob crypto trader, “Wow making money is easy!”.. first 10% move hits.. “WTF is a LIQUIDATION EMAIL!?!”

The more leverage you use – the tighter the price range before getting liquidated. With Bitcoin’s known volatility it is very difficult to consistently win on high leverage unless you are a SKILLED SCALPER and high frequency trader.

You are not going to win big sitting in a 100x long or short for days at a time..

Funding fees will be hitting your position consistently while “scam wicks” will hit your stops easily as large whales hunt stops to push large moves in the market. My recommendation is to follow the cryptocurrency market closely and try to save some extra fiat for larger buys when the market bottoms.

Automated small buys are a great option if you are completely disconnected from the markets.

Thank you GameKyuubi – I am sure you never expected a drunken rant to produce one of the most iconic phrases in cryptocurrency and that’s exactly what we needed. Pure honesty from an early Bitcoiner that solidified long term investment strategy for the hodler.

Hold your own keys.

Dollar cost average.

Utilize the best savings asset to protect your wealth and hard work through time.

2 thoughts on “What does HODL mean and where did it start?”

  1. Its hard to hold and I made the mistake of panic selling before, now I just make small buys for savings and forget about it. Less stress and the longer I’ve been holding the better it gets!

    I think this is the future savings plan for many Americans.

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