HODL is a term that basically means “buy and hold crypto”. It’s a one-word manifesto for certain cryptocurrency loyalists, some who are heavily invested in Bitcoin, who use HODL as the rallying cry to buy Bitcoin but not sell it.
Of course, HODL can be used in reference to any cryptocurrency or NFT, but there seems to be a particular spin on the word when Bitcoin loyalists use it. But no matter who is HODLing or why, one obvious question is asked sooner or later. Where did the term come from? Is it an acronym? Slang? Industry Jargon?
Origins Of HODLing
The origin story of the term HODL starts in 2013 when Bitcoin surged past $1000 in the winter, after having seen prices around $100 each in the previous spring. What is reported by some sources as a drunken post on the Bitcointalk forum is where the term accidentally became a viral meme.
A forum member going by the handle GameKyuubi wrote a post decrying their own lack of investment savvy.
The writer complained about having few investment skills, and announced their choice to hang on to Bitcoin rather than try to sell because they felt it was too difficult to “spot the highs” of the crypto market.
The writer declared, “I AM HODLING” in all caps, indicating a misspelled desire to buy and hold Bitcoin. Investopedia reports that within a single hour of that proclamation, HODL had gone viral.
HODL is the word “hold” mangled by too-fast or too-altered keyboarding. To HODL is simply to hold on to your Bitcoin or other investments without trying to sell them off for a profit. HODLing is the act of doing this or buying into the philosophy of doing so.
There are those who further developed the HODL meme, creating an acronym for the term; “Hold On for Dear Life”.
HODL in and of itself is fairly harmless as a meme but there are some crypto investors who approach this with a near QAnon sort of fervor; to a certain segment of the crypto community HODLing appears to be some kind of line in the sand.
If you don’t HODL, some in this camp may question your commitment “to the cause” of Bitcoin and the future of money. Calmer minds recognize that HODLing can be informed by emotions and as such isn’t useful as an investing strategy. Emotional investing of any kind is a very risky proposition.
What is a HODL Strategy?
Some sources note that HODL is a more common rallying cry in a bear market when times can get tough for crypto investors. In a bear market where prices may not favor the investor, HODL is an approach that basically has the trader tuning out the bad news and waiting for the return of a bull market.
If HODL strategy is essentially closer in some respects to the traditional buy-and-hold stock market approach, it’s no surprise that some investors might be hoping for the same long-tail returns for their investment as some expect from the stock market.
That’s painting with a very broad brush since cryptocurrency is in no way similar to buying trad stocks; no serious regulation and few external controls on the marketplace make investing in crypto a lot more like buying commodities than stock.
Stock Vs. Crypto
In particular, regulatory concerns aside, the biggest difference between crypto and stocks has to do with volatility. Stock prices simply aren’t subject to the same wild mood swings that crypto investors see in daily trading.
Stocks have more controls, and while they are still subject to issues related to FOMO, the fear-and-greed index, and other emotional investing topics, they simply do not carry the same inherent risk for loss of investment money as cryptocurrency.
Is HODLing Emotional Investing?
The HODL strategy seems to differ from more regulated investing because it requires a committed “damn the torpedoes, full speed ahead” approach. You may note that some dedicated HODLers just ignore all market corrections, price drops, and other volatility. They buy and hold with a determination you might otherwise associate with marathon running.
Some HODLers are informed by what more conservative investors view as wishful thinking; the notion that one day you won’t be tempted to trade in your Bitcoin for a large amount of cash. Instead, the thinking goes, you won’t NEED to because crypto will (according to the “true believers”) have replaced cash altogether.
It’s not our place to speculate whether this will or will not happen, but it’s worth mentioning that there’s an important place in that discussion for the role of government regulators and how such regulation might affect a cryptocurrency takeover of national or even global finance.
Regulation could make or break the HODL dream, and some believe that type of federal or global control will go far differently than HODLers want it to go.
What Does BUIDL Mean?
Unrelated to, but on the heels of the term HODL, a similar word was coined by Ivan Liljeqvist and essentially means “Build Useful Stuff” in specific reference to blockchain technology and cryptocurrency.
Liljeqvist is better known as Ivan On Tech, founder of what is now known as Moralis Academy. That enterprise is focused on offering software developers “a readily available blockchain backend infrastructure” that enables the simpler creation of decentralized apps using javascript.
When it comes to the BUIDL philosophy, Ivan On Tech believes HODLing isn’t enough to support and sustain the crypto community.
BUIDL thinking is more holistic. It seems to acknowledge that without more widespread use of crypto by end-users and more techs working to make it mainstream, crypto has limited utility and a limited future. Buying and holding crypto might help ensure the survival of the currency to some extent, but long-term thinking about utility and user acceptance in the crypto community via BUIDL could be the key to the survival of the ecosystem.
Joe Wallace has covered real estate and financial topics, including crypto and NFTs since 1995. His work has appeared on Veteran.com, The Pentagon Channel, ABC and many print and online publications. Joe is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.
