crypto market actors


Hodling cryptocurrencies: Diving into crypto HODLers

7 min Beginners


Being an investor is not easy and if you’re an investor in crypto assets then it has all that it takes to be a patient one. You see prices oscillating in both the directions in a very short period of time. Your wealth can double as well as halve in a few weeks depending on what level you entered. But what happens when you see prices rising 2000 percent in one year and then collapsing like nine pins in no less than 3 months? You see investors coming up with terms like Holding On for Dear Life or HODL, meme for HOLD in the crypto world.

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The term came into being for the first time when an investor misspelled it on a social media platform Redditt in 2013 but has been widely used this year after the prices of Bitcoin and all the other cryptos fell off the cliff after rallying last year as if there’s no tomorrow. Earlier it was only a meme to tease any investor who bought cryptos but soon it became a norm.

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Any investors who bought cryptocurrencies and held on to them can be termed as a HODLer.

The euphoria with which the crypto frenzy caught investors’ eyes, it can be said that not everyone entered the crypto market with an aim to be a HODLer, but rather to get rich quick. This happened especially last year when the only way market moved was up. But as the market turned, so it did investors' view from getting out quick to HODL on to their positions.

There are others too though, who truly believe in the future of the cryptocurrencies as a decentralized monetary system where no government has a real control and where bankers won’t have a say.

In that essence, these are the HODLers who are here to stay for the long haul and will continue to influence others too who may have skepticism in the present day monetary system or even as just another investment asset class that has potential to provide better returns and probably fairly quickly.

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First crypto launch

The jury is still out on whether the first ever (and also the largest) cryptocurrency launched in 2009 was just a coincidence or was it really the afterthought of the great financial crisis of 2008-09, that resulted in a loss of trust in the fiat currency, central banks and the governments by the general public.

This very essence of “quicker” returns is something that drives some other investors who are here as HODLers but won’t stay for long and flee away as soon as they see the first sign of pain. Akin to what we saw earlier this year when almost all the cryptocurrencies halved and such HODLers panicked and gave way to stronger hands.

On social media platform Twitter, a user with handle @rogerkver (Roger K Ver) from Tokyo, with more than 500,000 followers, is a known Bitcoin Cash HODLer and always lays out future plans of the crypto to his followers and does influence investors who may want to HODL on to their positions after they hear what Roger has to say.

But, there are risks to being a HODLer and one of the biggest of them being government regulation. Ever since the crypto market caught the frenzy of investors, governments, central banks and all the regulatory bodies across the globe have been scratching their heads and chalking out plans to control and regulate cryptocurrencies. That has been one of the key themes of 2018 and a very reason why the prices came crashing down this year. Perhaps this too is the reason why many HODLers flew away from the market and even if the new ones flock in, even they may not HODL on for long due to regulatory concerns.

No government wants to lose control over its economy and more importantly its financial system. If investors and consumers adopt cryptocurrencies widely, then chances are that consumers may start losing faith over the fiat money, not an ideal scenario any government would want to be in. That perhaps is the reason why India has been one of the latest countries that banned its banks in facilitating crypto transactions through their platforms.

Bitcoin vs. Ethereum

Regulation and technological advancement is the essence of cryptocurrencies. Bitcoin, though the largest and the first ever crypto, cannot process as many transactions per second as Ethereum, while Bitcoin is the poster boy of digital currencies.

What would you rather buy? The Poster Boy or the one that is technologically more advanced?