What does HODL mean and what does it represent? Can HODL be bought and sold?
What exactly is the HODL strategy? What is the best strategy when it comes to HODL?
Is it possible to make money through the HODL strategy? How do you choose the right investment and decide on a HODL strategy?
How is HODL used and how long can it be kept privately owned?
For any other questions related to Crypto we highly recommend checking out Cypherpunk Holdings as an excellent starting point.
Table of Contents
Meaning of HODL and its origin
HODL is a type of investment strategy that allows individuals to buy cryptocurrencies, as well as keep them for a longer period. A strategy is called buy and hold.
A smart and effective form of investment strategy, especially for those who are more prone to impulsive decisions or who are beginners.
The term HODL originated in a completely random way when the word hold was misspelled in a tweet back in 2013. It is an acronym for “hold on for dear life”, which means you are not selling at any price, but holding.
One of the highest quality forms of investment, it enables long-term profit, and despite the market and the range of prices from extreme highs to extreme lows, it remains the property of the owner. The strategy consists of investors who buy assets and hold them for a longer period.
When buying and holding investments, we suggest that you check well and inquire about the company you want to invest in, about their ups and downs over some time.
Pay close attention to earnings and sales within the company, what vision you have for the future in promotion and marketing, as well as in increasing the value of your shares.
How does HODL work?
In the crypto world, there are three different strategies, trading, staking, and holding.
Each type of strategy is different, but HODL is unique.
HODL functions as a long-term investment profit, which means you need a lot of time, patience and are not in a hurry.
The goal is not to sell your assets either when the price rises or when the price falls, the goal is to keep and stay in the game as long as possible.
In a way, control yourself, calm down and wait, observe more closely the markets and even seek the advice of professionals.
In contrast to long-term gain, there is a short-term gain strategy that most people pursue.
In this type of strategy, investors tend to buy when prices are low and sell when prices are high.
They sell their assets as soon as the price starts to fall, and due to haste and lack of information, they lose a lot of money.
Difference between HODL vs. Buy-and-Hold Investment
Buy-and-hold occurs when individuals buy assets, such as stocks, and hold them for a certain period of time, and this strategy is based on the assumption that the price of assets will rise in the future.
The goal of investors is not to beat a market, their goal is to match it, unlike the HODL strategy, where the goal of investors is to make as much profit as possible.
Of course, before investing, you must do a preliminary analysis of the market, the state of the company in which you want to invest, the range of profits and losses, investments, profits, and sales, as well as the quality of the content they produce.
Analyzes exist that show that those who choose this type of investment, usually do better because this type of strategy is usually better and more successful in the long run.
Steps you need to take to have a good HODL strategy
Step 1. – Market Analysis
The basic step in any investment is market analysis, where you consider the potential risks, price range in trading, profitability, and performance.
It is almost impossible to predict certain changes if you are not a professional, and for this item, we recommend that you contact someone who can give you clear and accurate instructions if it is too much to do yourself.
Step 2. – Take advantage of good attractive prices
This means that you need to take advantage of the lower price of the property so that you can sell it later at a much higher price.
Step 3. – Change the way you think
One of the main factors that will affect you is the way you think. You need to be disciplined and not let emotions, fears, and anxieties get to you.
Do not be discouraged, understand this as a kind of game, which has its ups and downs.
And one of the main things is to be very patient and to invest the time you might spend on too many thoughts in some other things that are important to you.
Step 4. – HODL for your assets
Hold your assets, if the price rises and falls, be patient and wait a few months or even a few years.
Since today we have cases where we see that a long-term investment from eight years ago has paid off, then the value of certain assets was almost zero. Since you keep your investment for a longer period, this is the only type of strategy that is not taxed.
Step 5. – Do not check the price situation
Don’t check the price situation, just don’t forget about them, don’t bother with that.
Focus your free time on some other activities that fulfill you, imagine that everything will pay off when the right time comes.
Do you need to pay taxes when HODL?
If you are a professional who knows exactly what is doing, and at what point the value of the price will rise and fall, while other people do not. You are unlikely to guess and anticipate any change in the market.
Capital gains on assets held for less than one year are taxed at a higher interest rate than those held for more than one year, taxation is significantly lower.
So in a way as long as you HODL the property you don’t pay taxes, if you sell your assets you will have to pay a certain amount of tax.
