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HODL – the psychological game of crypto investments

Posted on: July 6, 2018, by :
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Dan Muresan

Founder of Safe Crypto Trading & helping people to reach financial independence, investing in cryptocurrencies and blockchain technology. I worked at Fortune 500 international corporations from USA and Europe. Early adopter and investor in cryptocurrencies and stock markets, entrepreneur.

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HODL term, if you haven’t heard of it until now, started as a typo for HOLD. It became an Internet slang word used by the crypto community and it means to hold your cryptocurrency instead of selling it. It became an acronym for Hold On for Dear Life.

HODL-ing became harder and harder as we already closed 6 months from 2018 on a bear trend of crypto markets.

The trend is not over and we are still continuing in the 7th month of July to see continuation of the bearish sentiment. Regulations are still in place, governments got their noses into this. Some of them are trying to get a cut from taxes, others to benefit directly and involve or adopt blockchain technology.

As we read on reddit or Twitter, many people got a lot of panic moments. No one wasn’t HODL-ing anymore. We could see disappointment, despair, lack of confidence. Also, unrealistic expectation of gains of 10x, 100x in a short period of time. At the end of 2017 people were ecstatic, throwing in all they had, some were borrowing money, etc. Then complaints started to appear: bitcoin is a scam, it’s a bubble, it’s not for me, I lost everything, I sold at a loss so I won’t lose all my investments; you probably heard of these.

I said it then and I’m saying it again, selling in the last six months was a mistake. I was telling people to hodl for a long time.

This mistake will cause more despair and frustration when prices will recover. Because that’s how markets work, up and down. And since this is just the beginning, I am sure we will see new price records, that were not registered before. There are several reasons for this to happen. Even if we will see prices of $4.000 or $2.000 for one BTC, before going up – but I don’t think we will get there.

Keep in mind that is impossible for cryptocurrencies to disappear, on the contrary, and these are my reasons:

  • It will be easier and easier for everyone to invest in crypto (UX/UI improvements)
  • Crypto transactions will be cheaper and faster in the future
  • More people will enter the markets and start trading and using crypto
  • More institutional money will flow into cryptocurrencies

So hodl and buy more if you can. There is a lot of volatility but things are going to get better and better. You probably saw the news where Facebook announced that they will start allowing crypto ads again. It’s a good thing and it strengthens the crypto credibility and the fact that blockchain is here to stay.

Looking at the last six months we must understand that it’s normal what happened. And we have to be prepared for things to get even worse before they get better.

The strategy to survive a bear market & blood on the charts, for the long run win:

  • Do NOT check the price of your assets every day. HODL and just don’t look at the prices, you will feel better.
  • Get psychologically prepared 100%, by understanding that blockchain is representing the future.
  • Understand that you have entered the game early and what happens is normal.
  • Don’t expect to get rich quickly (although you will get rich quicker than most of people, by HODL-ing for a long time).
  • Do not invest more than 30% of your net worth in crypto (here you can learn how to calculate your net worth).
  • Buy more if you haven’t invested already up to 30% of your net worth. Do nothing if you are already at 30%.
  • Don’t expect to get money out of crypto at specific times, as a paycheck or similar source of income. You could be forced to sell at low prices if you need the money for paying bills or other daily expenses.

I hope the ideas above will help you to HODL each time we go through a bear market. Meanwhile you can read as much as you can about blockchain. There are tons of quality materials out there and you can learn something new almost every day.

What other ideas do you have for getting through this psychological game of HODL-ing when markets are low?

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