The term HODL originated as a misspelling of the word “hold.” Ultimately the acronym “hold on for dear life” was attached to the term.
Here’s what happened. On the fateful day of December 18, 2013, a trader with the username GameKyuubi (who later admitted to having had a whiskey or two), posted on a Bitcointalk forum: “I AM HODLING,” he began his memorable, drunken rant.
In the 24 hours prior to his post the price of Bitcoin had fallen 39%, from $716 to $438. This was after a year-long bull run in which Bitcoin rose from $15 in January 2013 to a high of over $1,100 in December 2013.Despite the turmoil, GameKyuubi had made up his mind to stop trying to time the markets, and to simply hold his Bitcoin from that point on.
“WHY AM I HOLDING? I’LL TELL YOU WHY,” the rant continued.
“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 … Just like that and make a millino bucks sure no problem bro. ”Despite the confusing spellings, GameKyuubi was voicing a common frustration among traders with how to manage price fluctuations. But GameKyuubi defended his hodl strategy. “You only sell in a bear market if you are a good day trader or an illusioned noob. The people in between hold. In a zero-sum game such as this, traders can only take your money if you sell.” The cryptoverse went wild. HODL became an internet meme within the hour, and its use as a legitimate investing term spread from there. So, the TL:DR version of the hodl meaning? It came about as the result of a typo.
Hodl and Cryptocurrencies
As mentioned, hodl can mean one of two things when discussing cryptocurrencies. Investors may be talking about a specific HODL strategy they’re using to gauge when to buy or sell crypto. Or they may be referring to the HODL token itself.
At the core of the hodl approach is the idea that crypto investors shouldn’t be trading based solely on short-term pricing moves. Instead, cryptocurrency investors should hold on to their coins or tokens, riding out periods of volatility as they come and go. Even though cryptocurrencies may dip, pricing still has potential to rebound, making up for losses over time.
This is what happened with the June 2021 crypto market crash. Many Bitcoin investors saw all of their 2021 gains wiped out after the cryptocurrency’s price dropped dramatically. Other cryptocurrencies, including Ethereum and Dogecoin, also charted sizable losses. But the down market proved to be temporary, as many crypto prices have inched back toward their pre-crash levels. Crypto investors who cashed out in the midst of the crash may have netted substantial losses. But those who chose to HODL instead may be eventually rewarded instead with much higher pricing moves as the cryptocurrency market rebounds.
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