The Only Good Bitcoin Advice Is Four Years Old Today
This article originally appeared on Motherboard.
Buying Bitcoin is a Faustian gambit; a real damned if you do, damned if you don’t kind of deal. On the one hand, if you do buy you’re now among the Bitcoin-holding elite and are no longer left out of the modern digital gold rush. On the other hand: What the hell do you do now?
For what it’s worth, I’ve never had to deal with this problem because as a reporter I’ve never invested in cryptocurrencies. But one piece of advice in the Bitcoin community has always stuck out to me as probably being the only way to stay sane once you’ve bought some digital coins that continually shoot upwards in value until they suddenly don’t. That is: HODL.
A misspelling of the word “hold,” chances are that you’ve seen this meme somewhere on the internet if you’ve been following Bitcoin at all. It’s a mantra no matter if Bitcoin’s price is rallying or tanking—don’t sell, hold. As Coin Center’s Neeraj Agrawal pointed out on Twitter Monday morning, the Bitcointalk forum post that started it all is four years old today. Posted by one “GameKyuubi,” the misspelled screed was made in the immediate aftermath of a now-legendary Bitcoin price crash in December of 2013. It was called, “I AM HODLING.”
Simply, HODLing means not selling your coins, even during a dip or a price crash. It’s about playing the long game and not being seduced by the promise of quick money if you spend all day, every day, with your eyes glued to price charts trying to divine the best moment to buy or sell. “It's because I'm a bad trader and I KNOW I'M A BAD TRADER,” Gamekyuubi wrote. “In a zero-sum game such as this, traders can only take your money if you sell.”
Basically, if you’ve bought Bitcoin keep in mind that you are not a banker just because you’re your own bank, and if you thought you’d be really good at day trading penny stocks then you’d be rich already.
The main thing is that everybody buying Bitcoin—which is to say, purchasing entries on a digital ledger—is betting that this ledger will be used for something one day. But nobody really knows what that will be, if anything. It’s looking less and less like that ledger and its in-house currency will be a way to pay for things, and now a contingent of Bitcoiners are comparing a bitcoin to a commodity investment like a barrel of oil. This should tell you that nobody has any clue about where this will go. You could spend every waking moment trying to figure it out and how to profit, or you could just not worry about it. I know which sounds better to me.
There are reasons to HODL besides peace of mind. One argument is that you could one day sell and be fabulously wealthy, which, okay, I don’t know. Maybe. Another is that holding keeps the Bitcoin market stable since holders don’t contribute to the massive sell-offs that cause price drops. Finally, hardcore Bitcoiners will tell you that the blockchain cares not for the worth of fiat money and neither should you—the only thing that matters is holding some satoshis after a coming Bitcoin revolution when everything is counted in BTC.
But, I think, the main thing is just not to stress. This is true if you own Bitcoin, or if you don’t.