A type of investment strategy where an investor holds an investment for a long period of time, regardless of any changes in the price or markets. The term “HODL” first became famous due to a typo made in a Bitcoin forum, and the term is now commonly expanded to stand for “Hold On for Dear Life.”

What Is HODL?

HODL is a term used in the cryptocurrency community that stands for “hold on for dear life.” It is a popular meme among crypto investors and a play-on-words on the word “hold.” The term refers to an investment strategy of buying cryptocurrency with the intent of never selling it.

What Does HODL Mean?

HODL is a term used to describe the act of buying a cryptocurrency and never selling it. The goal of this strategy is to ride out the volatility of the investment and eventually benefit from a long-term appreciation of the coin. Although there is no guarantee of price appreciation, cryptocurrency investors adamantly believe that holding a coin long enough will eventually lead to positive returns. In past, this has been particularly true for Bitcoin and Ethereum investments.

HODL also refers to staying calm during periods of increased emotionality in the markets, also known as FUD. Those who HODL during these periods of increased uncertainty presumably weather the FUD and eventually get rewarded in the form of positive returns on their investment.

The Origin of HODL

The term “HODL” was created on a forum discussion about Bitcoin in 2013. People were holding onto their Bitcoin investments during the bull run of that year, which saw the price of Bitcoin increase significantly. However, at the end of 2013, the price of Bitcoin fell by 39%, and people started to panic sell. The term “HODL” was created as a joke to make fun of those who were selling at a loss. It is now used to describe holding onto an investment for dear life.

The HODL Strategy

The HODL investment strategy is based on having extreme conviction in an investment and being committed to not selling no matter how bad the drawdown. This means that the HODL strategy can be applied to any investment, but is most commonly used when investing in cryptocurrencies, like Bitcoin. In a HODL strategy, investors must stay calm and refrain from panic selling when the market is experiencing high volatility or extended bear markets.

The HODL strategy can be profitable for traders that buy in at low prices, but there is no guarantee that it will be profitable in the long term. At the time of writing, in November 2022, investors that bought Bitcoin in December 2017 would be in a loss, despite having been in profit for a long time during their investment. Therefore, it’s important to remember that HODL is a long-term investment strategy with the assumption that Bitcoin will eventually be adopted as a store of value by the majority of investors.

HODL in the Media

HODL has become a popular meme in the cryptocurrency industry and has achieved mainstream popularity. Different mainstream media outlets, like The Washington Post and CNBC, have covered the meaning of HODL and the underlying investment strategy of crypto maximalists. It is also often combined with other memes in the crypto industry, particularly in the Bitcoin community.

The HODL meme is one of the most important aspects of the cryptocurrency community. This meme is used to describe the belief that cryptocurrency will eventually replace fiat currencies. Crypto investors identify with this meme and hold on to their digital assets in order to see long-term success.