June 25, 2021

HODL Meaning

HODL Meaning

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People new to the cryptocurrency online world and Fintwit may wonder what the word “HODL” means after hearing it all the time in the context of investing and trading especially with bitcoin.

What does HODL mean? “HODL” originally came from a typo in the title of a post from a BitcoinTalk.org forum in 2013. The post appeared to be a drunken rant filled with typos and misspellings by someone losing money on bitcoin and deciding to just give up trading it and hold it to make money over the long term. 

The term “HODL” started out as a joke referring back to the post but quickly went viral and became the rallying cry of people very bullish on bitcoin over the long term that were just going to hold it and not sell. It went on later to be adopted by other cryptocurrency long term holders like Dogecoin and even meme stockholders of Gamestop and AMC in 2021. It became the rallying cry of buying and holding and never selling an investment in the belief that it would always go higher over the long term.

The term HODL has come to mean that it is a mistake to sell a good long term investment when it drops dramatically out of fear. HODL also means it is a mistake to sell when an asset rises dramatically for a huge profit as it will go even higher in the future.

“HODL” has also become known for standing for the acronym “Hold on for dear life.”

The HODL community believes that you can’t lose money if you don’t sell, certain things can only go higher, and bitcoin will reach $100,000 or more at some point in the future. Holding and not selling is considered having diamond hands, panic selling quickly is considered paper hands, and putting laser eyes on your profile picture shows you are long term bullish on bitcoin. This is the opposite of active trading. 

The original HODLer in the investment world was Warren Buffett who has held the majority of his Berkshire-Hathaway stock shares since the early 1960s and only sells if he needs to raise money. Buffett also thinks the S&P 500 index is one of the best long term HODL assets by the way the index is constructed.

“Our favorite holding period is forever.” – Warren Buffett

HODL Meaning

Rekneh, Public domain, via Wikimedia Commons