HODL: Hold on for dear life! In the investing world, there is a saying that goes "buy low, sell high." This adage is simple but difficult to execute. After all, if everyone were able to buy low and sell high, then everyone would be rich. The key to successful investing is buying assets when they are undervalued and selling them when they are overvalued. But how do you know when an asset is under- or overvalued? And what does it mean to "buy-and-hold?"
In the cryptocurrency world, there is a similar saying: "HODL", or holding on for dear life. But what does this phrase mean? And what are the benefits of buy-and-holding crypto? Let's take a closer look.
What Does it Mean to "Hold on for dear life (HODL)?"
"Buy-and-hold" is an investment strategy in which an investor buys an asset and holds onto it for a long period of time, regardless of fluctuations in the market. The goal of buy-and-hold investors is to weather the storm of short-term market volatility and come out ahead in the long run.
There are a few things that all buy-and-hold investors have in common: patience, discipline, and conviction in their investment thesis. Buy-and-hold investors believe that over time, the market will correct itself and their investments will go up in value. They are willing to wait out the ups and downs of the market because they believe that eventually, their investments will reach their full potential.
Why Buy and Hold Crypto?
Cryptocurrencies are still in their infancy stage and therefore relatively volatile compared to more established asset classes like stocks or bonds. However, many experts believe that cryptocurrencies have a bright future. They are seen as an alternative to traditional fiat currencies like USD or EUR and have the potential to disrupt numerous industries ranging from banking to supply chain management.
Institutional investors have only recently begun to enter the crypto space. As more institutions pile into crypto, analysts expect the volatility of cryptocurrencies to decrease. This newfound stability could lead to mass adoption by retail investors who have been holding off on investing in crypto due to its volatile nature.
If you believe in the long-term potential of crypto, then buy-and-holding may be the right strategy for you. By buying crypto now and holding onto it for years to come, you could reap massive rewards down the road.
The cryptocurrency markets are still in their early stages and therefore subject to volatile swings. However, many experts believe that cryptocurrencies have a bright future. If you believe in the long-term potential of crypto, then buy-and-hold may be the right strategy for you. By buying crypto now and holding onto it for years to come, you could reap massive rewards down the road.