What is Hodling?
Hodling is a crypto investment strategy originated from a drunk post on the Bitcoin forum. Since then it became a widely known meme and also an essential term used by many in the crypto community. Hodling is also equal to the buy and hold strategy in traditional investing.
As a strategy, hodling is the process of buying crypto-assets and holding them generally for a couple of years. This strategy is widely accepted in the crypto world.
Is hodling a good strategy now?
Some hodlers are crypto fanatics with an indestructible belief in the future of crypto coins. They believe that Bitcoin will hit an astronomically high price soon and they will become instant crypto millionaires. For all the rational minded hodlers out there, it can be quite profitable long term strategy.
As a crypto investment strategy, hodling is very straightforward and highly recommended for beginners. It doesn’t require thorough knowledge of the market, special terms or advanced strategies.
This strategy relies on the crypto market’s ability to generate large profits over time. The volatility of crypto assets is extremely high, which is highly beneficial for investors.
For instance, a Norwegian man named Kristoffer Koch bought 5,000 bitcoins in 2009 and forgot about them until 2013 when his holdings were already worth $886,000.
From 2014 to 2019, in a span of only 5 years, the BTC value grew by over 100% and the LTC value by over 550%. Compared to traditional investing markets this growth almost seems unbelievable.
Despite all of this, it is becoming increasingly harder to generate profits by hodling one asset. Nevertheless, the solution to this problem is simple. It is highly recommended to diversify your crypto portfolio by investing in a handful of crypto assets.
Of course, in this sea of crypto coins it can be hard to navigate which ones to invest in. However, high market cap coins that you believe in, are always a good bet.
High market capitalization will ensure that you don’t have to worry about ‘pump and dump’ schemes and things of that sort. You can also invest in moderately famous coins, such as Bytom, Augur, Nano and so on.
This will also help to diversify your risks and invest relatively safely. Buy a couple of coins, hodl them and track them on your crypto portfolio tracker. In a nutshell, maximize your profits and minimize risks. On the other hand, by hodling you also avoid the difficulties of day trading such as stress, the spent time and so on. As most crypto investors don’t have the time of day to spend on trading, hodling becomes their saving grace.
Although some hodlers say to buy cryptos whenever you feel like, it is generally more advisable to buy coins during a bear market (when the price is low).
To summarize, hodling is a strategy for those who believe in the long term prospects of crypto coins and want to invest in the most efficient way possible. Is you want to track your holdings, just take a look at this cryptocurrency portfolio tracker guide and start using one of these tools to get better results.