HODL - The American scholarship collapsed in 1987. Sam Walton, the richest man in the world at the time, lost more than half a billion dollars in a few hours. Asked what he thought about the situation, Walton replied, "Anyway, it's just paper. As far as I'm concerned, I totally focus on the company. Work well and take care of customers. "He did not care about paper money. He only cared about his hypermarket chain, Wal-Mart. He was still the owner there.
History of HODL strategy
In the volatile past of the bitcoin, HODL was the common strategy that binds investors. It symbolized the idea that we all trust the future of the bitcoin. It's fun and funny.
We're not talking about bitcoin against cash or about 1000 other crypto. We used to talk about the bitcoin against the system, and we all got this idea.
Good traders
GameKyuubi was wrong with one thing - there are no good traders.
Many of us think we are good traders. But we are not. Of course, some of the loudest voices on Reddit and Telegram always remember how well the market rhythms are. If we do not even think of those moments when they do not really know well.
A paper published in October last year by Berkley's Haas Business School, entitled "Traders teach rationally to trade?", Used data for 15 years on the stock market to conclude that all day traders are irrational. Most traders even lose money, and even when they are successful, "irrationally and disproportionately, they place their success on account of their abilities instead of putting it to good luck."
The idea describes the trader on the crypto market. Any post you see and that makes jokes about the HODL strategy is probably written by someone who thinks very smart because he made money from trading last year.
Of course, success is due to their unique trading abilities, not to the fact that the whole market took off as a rocket.
The HODL strategy works
However, empirically speaking, even when it comes to volatile assets like bitcoin, careful choice and preservation of long-term positions has proved to be the best profits.
Warren Buffet, the most successful modern investor, has often said he only invests in what he knows. He prefers to keep his assets ... definitively. With this model, his company, Berkshire Hathaway, has averaged 19% profits since 1965 and so far. That means it has increased 10,000 times.
Theoretical models assume that participants know when the market is adverse and that it brings them profits. In practice, market movements can not be too well predicted. Even when some people like Bernie Madoff are trying to make us think they have caught up with things, it's not like that.
Long-term investment in quality assets remains the only investment strategy you can rely on.
In simple terms, the HODL strategy works.
More possibilities
For those who are not interested in limiting to HODL, there are two new and useful ideas that are being discussed on the market and which actually make cryptomonads move forward - BUIDL and SPEDN.
BUIDL is a term used to remind us, in the words of the CypherPUnk manifesto, that "Cypherpunks are the ones who write the code."
For the blockchain to be really useful and valuable, we must build on it. If we look at how the price increases or decreases, as traders or HODLERS, we do not make the bitcoin go better.
We have to create those applications that promise to change the world. Until now, the blockchain community has come out on the minus, outside of payment areas. But we have some net gains.
All kinds of voting platforms have appeared on the blockchain, which at this stage works. Blockchain technology offers transparency and immutability, just what a trusted voting system needs. Voting on a blockchain is a simple application, but it can bring the security and transparency we need in the electoral system.
SPEDN is the idea that, in order for the Bitcoin to be really useful, it must function as a payment currency. We need to buy things in the real world with cryptomonas. Goods of all kinds. It does not matter if we do this through secondary solutions such as lightning or bifurcates like cash bitcoin. We need more methods of using cryptomonas in everyday transactions.
There is a need for more merchants in the market to accept cryptomonas. The bitcoin shopping options are very limited, and this will eventually limit the bitcoin's value.
As far as I'm concerned, I'll do the HODL until I can buy things that are really useful to me and go to SPEDN.
HODL still
This year we have been under intense pressure from the authorities. But we have to end the discussion that the HODL strategy is bad. Those who are against the HODL mentality have to give HODLERS something to do with bitcoins.
Trading is not an endless solution. We need new methods to use cryptomoneda. We need traders to accept the bitcoin and we need people to build on blockchain platforms really useful applications.
