"The greatest enemy of the average investor is not the market, but himself" - this wisdom from Warren Buffett summarizes the essence of the strategy (a misspelling of the word Hold) HODL. Did you know that investors who held Bitcoin for 5 years or more have never lost, regardless of when they bought?
Mustafa, a university professor, bought Bitcoin in 2017 for $19,000, then watched its value crash to $3,000 in 2018. "I was about to sell at a huge loss, but my colleague convinced me to hold." Today, Mustafa smiles every time he remembers that wise decision.
HODL is the simplest and strongest strategy in the crypto world: buy and hold for the long term, regardless of short-term volatility. It seems simple, but executing it requires rare patience and psychological steadiness.
Why is HODL considered the most effective strategy for beginners?
- Overcomes daily noise: Crypto markets are filled with noise - news, rumors, conflicting analyses. The HODL strategy allows you to ignore all that and focus on the big picture.
- Reduces emotional errors: Most traders buy when the price rises (out of greed) and sell when it falls (out of fear) - the exact opposite of what should be done. HODL protects you from this destructive cycle.
- Avoids market timing: Even experts fail to time market peaks and troughs accurately. HODL eliminates the need for this nearly impossible task.
- Reduces taxes and fees: Frequent trading means recurring fees and higher taxes (in some countries). Long-term holding significantly reduces these costs.
Sarah shares her experience: "I put 10% of my monthly salary into Bitcoin and Ethereum since 2019, regardless of the price. I never sold. Today, the value of my portfolio exceeds what I would have achieved with any active trading strategy."
But HODL is not suitable for all conditions or currencies. Here are some guidelines:
- Choose wisely what to hold: HODL works best with currencies that have strong fundamentals and long-term projects like Bitcoin and Ethereum. Not all currencies will survive in the long run.
- Set a time horizon: Holding does not mean forever. Set a time frame (3-5 years for example) or a price target for review.
- Allocate an appropriate percentage: Do not put all your investments into one strategy. You can allocate a large portion for long-term holding, and a small part for active trading if you enjoy it.
Michael Saylor, CEO of MicroStrategy, says: "Bitcoin is not for trading, but for holding. It is a technology that will change the world, not just a speculative tool."
Remember that HODL requires strong faith in technology and long patience. As Robert Kiyosaki says: "Patience is a form of action." In the crypto world, patience may be the hardest and most rewarding work.
In the next post, we will talk about how to deal with market volatility - the dark side of the HODL journey. Are you ready to learn the art of perseverance amidst the storms?
