Let’s briefly explore the origins of HODL and what it means? Why it’s important? — actually is it important? What can we take from knowing its origins? Will knowing it increase your Investor IQ by 5–7 points? We will explore one of the key concepts of crypto folklore and how a meme can drive an investment strategy.
So HODL can be construed in a few ways:
- A misspelling of Hold
- A backronym — Hold on for dear life
- A misrepresentation and corruption of the name Hodor
Whichever you subscribe to today, the origins of HODL can be traced back to a Bitcoin Forum post by GameKyuubi on December 18, 2013 in a spelling and grammatically ill-formed rant, fueled by whiskey and general negative sentiment on Bitcoin’s price action and GameKyuubi’s lack of trading sophistication and strategy.
The title of the post was “I AM HODLING” and its crypto-generation defining contents were laid out as follows:
“I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
(but only if it’s payable in BTC)”
*Pasted as it was posted. So yes, the spelling and grammatical errors are all authentically true!
Within a very short time frame, this meme went global and became the standard investment strategy for noobs (an inexperienced person in a particular sphere) entering the crypto space.
Hodling is counter to a day-trading approach, where short term swings, or 39% drops within a 24hr time frame, merely bounce off of a Hodler’s iron will and resolve. GameKyuubi points out two approaches, firstly, the good traders that can spot the highs and lows and trade for a ‘millino’ bucks in profit, and secondly, the opposite of a Hodler, the Weak Hands that sell when the price is going down. In lieu of being able to effectively trade, he points out the third approach, for the people in between, like GameKyuubi, to Hodl and ride the volatility.
One of the salient points to note from GameKyuubi’s rant is the importance of knowing what you are doing if you are going to trade, and that “in a zero-sum game such as this, traders can only take your money if you sell”.
So why sell if you can HODL?