HODL HODLing: In those days when cryptocurrency seams to be nothing before humans, now development has taken place, the concept was heavily criticized by people with great fear, and murmuring across the world.
Then people started understanding it and they were happy to learn how it works, and now its adoption and acceptance are increasing by 50% daily. It is now one of the most talked about Crypto.
This is what Warren Buffett thinks and the purpose of it is never to lose money to make a profit. The only way not to lose money in the cryptocurrency market is to invest in a safe platform that is trusted worldwide.
A long-term investment is good and it is also the most important way to grow wealth in the space. To invest in the long term there are three main principles:
- Reduce risk and don’t lose money
- Don’t make a fuss
- Get benefits in future
HODL investment is the easiest and the most comfortable way to make money in the crypto market and it is generally referred to as Hodl.
What Is HODL?
HODL is the acronym for Hold On for Dear Life. it was originated from the misspelling of hold in the process of buying and holding bitcoin and other cryptocurrencies in 2013 through the Bitcoin-talk forum.
amazingly when the word went popular the price of BTC was less than a thousand dollars in 2013, and the author was mocking him for not being a good trader and he is going to keep holding, and ever since the word has been used globally among investors.
If he had stayed true to his words and he did hold on to date even with the current rise of BTC price he could have been a rich man today.
What Is HODLing?
HODLing is an ideological belief in the long-term prospect of Blockchain and cryptocurrency following its adoption and acceptance. HODLing is more than what you think concerning buying a coin at a low price and selling high in the nearest future, that will only limit when you can master HODLing.
It doesn’t rely on time and slightly depends on the price. The reason it is said to depend slightly on the price is that every moment is the right time to HODL, you are not buying to sell when the price rises in a day or few weeks but for a long time.
HODLing Crypto Investors
Investors have created different methods widely adopted in order not to miss out on the opportunity to HODL and it is called Dollar cost averaging and applying a moving average strategy that will keep it.
Let’s take the example of Mr. Asisu who plans to invest in a coin that is priced at $700, if he bought 2 pieces of the coin that is $1400. Let’s assume he sold them for $705 he had made a profit of $70+. That is nice right?
Let’s put it this way what if he plans to buy 20 pieces just like earlier but not at once and he spread the payment over a month there is a high possibility that the price fluctuates over that period so there are times he would have gotten it at a lesser price and also higher.
In this approach, he would have spread his profit and also spread his loss. Thus achieving the following:
- Reducing the average price of purchase
- Buying more shares for the same money
- Reducing losses in the falls and emerging from losses more quickly on the rise
- It reduces the burden and allows you to buy more cryptocurrency comfortably at a specific period.
There is also another method known as the exponential moving average strategy. Here when the price stays or goes up make the usual purchase, when the price goes down, you buy more so when the price goes up you recover all the losses and make more profit.
However, altcoins like Cardano, Avalanche, Solana, Polkadot Dogecoin, etc should be considered first because their liquidity is higher and they are not expensive.
Read: RENEC Blockchain
In conclusion: HODL will start functioning next year, and you are to save more money so that you will be among the first people to enroll.