If you are familiar with cryptocurrency or digital currency, there’s a 99% chance you have come across the word “HODL.” This term is used among people who deal with cryptocurrency, particularly investors. This term came to existence in 2013 in a chat forum after the sharp price fall of Bitcoin. This term is an investment term; it means buying and keeping cryptocurrency regardless of the price change. HODLers are people who invest in cryptocurrency; they buy and hold digital currency. The term HODLing came as a spelling mistake but was broadly adopted among the bitcoin community. People turned into an acronym: Hold On for Dear Life. HODLing is a long-term investment; it’s different from buying to and selling. Trading is short-term.
To get the most from HODLing digital assets, you will need more than just your money; you will need a strategic method to get you over. You will need facts above emotions. Fortunately, you can achieve this by employing crypto trading bots. Crypto trading bots like The News Spy responds to a trader-created algorithm. The investor programs this bot based on set parameters to which the bot responds; parameters such as price, volume, and liquidity. The bot regularly checks these parameters issuing buy or sell signals. This can save you from a terrible and unyielding investment. It gets you off the path of futile investments. They are just the perfect tool to help you in this stage.
How to HODL rightly
When prices are low relative to the recent ups and downs, average into a position over time (days, weeks, months, or even years) to HODL properly. This assists you in avoiding market timing errors. Then, when you see some excellent results, try withdrawing some [but not all] of your money off the table to average back in later. This involves a lot of patience and emotional control (since messing it up is as simple as clicking the “buy” or “sell” button).
Why should you HODL?
HODLing could be an excellent entry technique for new crypto investors. HODLing may be significantly more straightforward than the intricacy of day trading, which is incredibly hard and time-consuming. Unlike some other tactics, it does not have a steep learning curve and does not necessitate a full-time commitment.
This is one of the most significant advantages of using the hodling approach. You won’t have to worry about constantly buying and selling cryptocurrencies, paying fees, or other time-consuming tasks if you buy cryptocurrencies for the long term.
This passive investment method has proven to be successful for investors in both cryptocurrency and traditional markets. You must ensure that your assets are safe in a wallet and out of reach of thieves. You can wait as long as you like to sell the funds you’ve amassed over time as long as you preserve your private keys.
Risks of HODLing
Despite the recent high returns and the motivations to buy, savvy investors should be aware of the hazards associated with cryptocurrency HODLing. Cryptocurrency prices are pretty volatile. Investors may be subjected to dramatic ups and downs in asset values, implying that they must have significantly higher risk tolerances than investors in traditional financial vehicles. To avoid forced sales or meet unanticipated liquidity needs, they must have sufficient capital capacity.
While hodling may be a solid strategy for long-term investors, it may not be appropriate for traders looking for quick profits in the crypto market. Indeed, swing and day trading activities would be preferable for the last category.
It could take several years for a hodling technique to pay off for users. Indeed, if you didn’t average buy Bitcoin, it might be even more challenging to make money.
Hodling crypto can earn you a lifetime fortune. However, tread carefully. The crypto market is a highly volatile one. Before investing in crypto assets, make sure to do some critical research and evaluation not to lose all your hard-earned money. We will strongly advise you to use trading bots, as they can minimize your risk of a bad investment.