IN 2013 year on Bitcointalk there was a thread I AM HODLING. In her trader GameKyuubi explained, why didn’t sell bitcoins at the peak. There was a typo in the title: "I AM DEZHRU".
Hodl has become synonymous with buy and hold. In the crypto community, hodlers are called long-term investors, and the investment itself is a hodlom.
In this article, we will tell, why HODL is profitable and how to make money on it.
Why hodlers make money
In the long term, the market grows. This is not an ongoing process.: crises and periods of stagnation occur.
Dow-Jones Industrial grew in 510 times with 1915 of the year (a source: TradingView)Dow-Jones Industrial grew in 510 times with 1915 of the year (a source: TradingView)
Traders make predictions. They buy assets, which should rise in value. Sometimes predictions don't come true, and assets are getting cheaper.
A fall in price does not always mean the end of a bull market. But traders panic and close positions at a loss.
Hodlers don't make predictions. They believe, that the market will rise to a new high. Hodlers buy and hold an asset, until they make a profit.
Trading vs hodling
Consider schedule bitcoin for january 2020. Green arrows indicate large volumes of purchases. Traders believed in market growth and bought bitcoin. Red arrows - panic sales. Arrow trade would bring 14% arrived.
Estimated points for buying on a rise and selling on a pullback (a source: Tradingview)Estimated points for buying on a rise and selling on a pullback (a source: Tradingview)
Benefit from Hodl - 30%. How much users have earned, who bought bitcoin 1 January and sold a month later.
Points to enter and exit hodling (a source: Tradingview)Points to enter and exit hodling (a source: Tradingview)
How we went to bitcoin
The HODL strategy was invented a hundred years before the advent of cryptocurrencies. Experienced investors earned money from hodling, self-taught and circus monkeys (in earnest).
Hodler-self-taught
The first self-taught hodler was described by the speculator Jesse Livermore in the book "How to Trade Stocks".
Hodler lived as a hermit in the California mountains. He went to the stock exchange three times a year, only bought and won constantly. The hermit explained his strategy to Livermore:
“I would go broke, if I was confused and distracted by minor market changes. Real moves don't end that day, when did they start ".
Hodler-professional
Jim Rogers is an American investor. He founded Quantum hedge fund with George Soros. They traded for ten years without loss.
Rogers' favorite strategy is to buy stocks during stagnant prices and hold them for several years.. IN 1982 year he found out, that German companies do not expand production and save money. The reason for this behavior was the high taxes.
Rogers decided, that someday the authorities will lower taxes. In this case, the rate of production will rise and the stock will rise in price.. Rogers bought shares in German companies. He walked them for four years and made a profit $3 million.
Four Years of HODL by Jim Rogers (a source: Tradingview)Four Years of HODL by Jim Rogers (a source: Tradingview)
Hodler monkey
IN 2008 the Russian magazine "Finance" conducted an experiment with a circus monkey named Lukerya.
Lukerye was given thirty cubes with the names of Russian companies. She chose eight cubes for investment. The experimenters mentally invested a million rubles in these shares..
TO 2009 year, the monkey's portfolio has risen in price by 194%. At the same time, the index of the Moscow Exchange rose by 107%. During the hodling, Lukerya earned hypothetical 1.94 million rubles.
How Bitcoin is used
Cryptocurrency better for hodling: it can grow several times over a year. Patient newbies and bitcoin whales make money on it.
Lucky Hodler
IN 2009 year Norwegian student Christopher Koch learned about bitcoin. For the experiment, he bought 5000 bitcoin for $27 and forgot about them on 4 of the year.
IN 2013 year bitcoin grew to $259. The media started talking about cryptocurrency. Koch heard a familiar word and found a wallet key.
In the same year, Christopher Koch sold bitcoins at $177. He received $877 000 arrived. Today 5000 BTC is $45 million.
Hodler whales
One hundred rich bitcoin addresses have not withdrawn coins for five years. These wallets contain 592 000 BTC ($5,79 billion at the time of writing).
Wallets are not abandoned. Owners replenished addresses after a bullish rally 2019 of the year. Then Bitcoin quadrupled from May to July..
Probably, these are the wallets of the big hodlers.
Three life hacks for hodlers
Hodler's secret to profit is the ability to wait. Forget the market, like Koch and Lukerya. Pay no mind to the hesitation, like Rogers and the bitcoin whales.
Reduce market noise
Select a period of one week or a month on the chart, and then translate it to candles Heiken Ashi.
The Heiken Ashi tool smooths chart fluctuations and shows the main trend. So you won't panic over small falls..
Heiken Ashi (above) and regular Japanese candlesticks on the monthly BTC chart (a source: Tradingview)Heiken Ashi (above) and regular Japanese candlesticks on the monthly BTC chart (a source: Tradingview)
Buy cryptocurrency with free money
Investments and HODL are risky ways to make money. Invest small amounts in cryptocurrency, not to worry about possible losses.
Play Moriarty
Moriarty is a cryptocurrency hodling simulator. Moriarty credits players with interest on the deposit. Interest increases every day. Percentage growth is shown in the graph.
For example, the player makes a deposit 100 ETH. On the chart - 8%. On the first day, the player will receive 8 ETH profit. On the second day, the chart will grow to 9%. The player will receive 9 ETH.
The aim of the game is to wait, when the profit will be more than the deposit. The player can take profit earlier, but then his deposit will burn out.
The game ends, when there is less in it 10% from all deposits made.
conclusions
Traders Lose Money Through Mistakes and Worry. HODL strategy helps to protect yourself from emotions and increases the chances of profit.
No special skills are needed for hodling - just calmness and patience.
Remember, what HODL, investing and trading is a risky way to make money. No strategy guarantees profit on every trade.
