If you’ve been exploring cryptocurrency investing, you may have come across the term “HODL.” It’s more than just a misspelled word—it’s a mindset embraced by many crypto investors. HODL represents the idea of holding onto your investments through the ups and downs of the market while staying focused on the long term.
Let’s break down where this term comes from, why it’s so popular, and what it could mean for you as an investor.
What does HODL mean? How it became a crypto investing strategy?
Table of contents
- What is HODL in crypto?
- The history of HODL
- Why do people HODL?
- When to use the HODL strategy?
- How to implement the HODL strategy?
- Pros and cons of the HODL strategy
- Alternatives to HODLing
- Choosing the right strategy for you
- Comparing HODL and traditional buy-and-hold strategies
- The bottom line
- Frequently asked questions
Key takeaways
HODL meaning: Originating from a typo, HODL means holding onto cryptocurrency investments long-term, even during market volatility, and is often interpreted as “Hold On for Dear Life.”
Why people HODL: Investors HODL because they believe in the long-term potential of crypto, want to avoid the difficulty of timing the market, and aim to benefit from tax advantages for long-term holdings.
HODL vs. traditional buy-and-hold: While both focus on long-term investments, HODL applies to speculative assets like crypto, whereas buy-and-hold is typically backed by stable fundamentals in stocks or ETFs.
What is HODL in crypto?
HODL is a slang term born from a misspelling of “hold,” first appearing in 2013 on a Bitcoin forum. A frustrated investor, reacting to market volatility, declared they were “HODLing” their Bitcoin instead of selling. The typo quickly gained popularity and evolved into a mindset symbolizing long-term investment, even during market downturns.
While originally a simple typo, HODL now carries deeper meaning, often interpreted as “Hold On for Dear Life,” reflecting the volatile nature of crypto markets and the commitment to weathering fluctuations for long-term gains.
The history of HODL
The term originated during a Bitcoin market dip in 2013. A user named GameKyuubi, after a few drinks, posted the now-iconic line:
“I AM HODLING.”
The misspelling became a viral meme and soon turned into a rallying cry for investors to hold onto their assets despite volatility. The acronym “Hold On for Dear Life” was later associated with the term, cementing HODL as a symbol of steadfastness in crypto investing.
Why do people HODL?
1. Belief in long-term value:
HODLers often believe in the long-term potential of cryptocurrencies like Bitcoin or Ethereum. They view these assets as transformative technologies that could redefine finance, and they’re willing to weather short-term volatility to capture long-term gains.
2. Avoiding market timing:
Timing the market—buying at the lowest point and selling at the highest—is notoriously difficult, even for experienced investors. By HODLing, you avoid the risks of mistiming your trades.
3. Tax implications:
Selling investments, including cryptocurrencies, can trigger capital gains taxes. By holding onto assets for more than a year, investors may qualify for long-term capital gains tax rates, which are typically lower than short-term rates.
When to use the HODL strategy?
HODLing can be an effective approach during periods of high market volatility, especially for investors aiming to benefit from long-term growth. For instance, in early 2025, Bitcoin experienced significant price fluctuations, reaching a high of $102,378. Despite predictions of potential further growth—such as BlackRock CEO Larry Fink’s statement that Bitcoin could reach $700,000 if institutional investors allocate more resources—volatility remains a defining feature of the cryptocurrency market.
This strategy is best suited for investors with a long-term time horizon who do not need immediate access to their funds. For example, those who held onto Bitcoin through earlier market downturns, such as its sharp decline in 2020, saw substantial returns when the asset rebounded months or years later. If you prioritize quick returns or liquidity, HODLing may not align with your financial goals.
How to implement the HODL strategy?
- Set clear goals – Define your investment timeframe and objectives before committing to HODLing.
- Use Dollar-Cost Averaging (DCA) – Invest a fixed amount regularly to reduce the impact of market volatility.
- Example: Investing $500 in Bitcoin every month throughout 2025 helps average the purchase price over time, reducing the risk of buying at market peaks.
- Choose a secure wallet – Store your cryptocurrency in a reliable hardware or software wallet for long-term safety.
- Automate investments – Use platforms with recurring investment features, like Public’s automated investing, to stay consistent and disciplined.
- Diversify your portfolio – Consider adding cryptocurrency ETFs, such as Bitcoin ETFs, to balance risks and gain exposure to the crypto market without directly owning volatile assets.
- Stay informed – Keep up with market trends and regulatory updates without reacting to short-term price swings.
- Avoid emotional decisions – Stick to your strategy despite market fluctuations and avoid panic selling.
Pros and cons of the HODL strategy
When considering whether HODLing is the right approach for you, it’s important to weigh the advantages and disadvantages. While the buy-and-hold strategy is often considered sound for traditional investments, cryptocurrency comes with unique risks due to its volatility. Here’s a breakdown of the pros and cons:
Pros of HODLing | Cons of HODLing |
Doesn’t rely on market timing: HODLing eliminates the need to predict market shifts, which is notoriously difficult even for experienced traders. | No historical track record: Cryptocurrency is relatively new, so there’s no long-term data to validate the effectiveness of HODLing. |
Hands-off investment strategy: Investors can avoid the stress of monitoring market movements and timing sales. | Ties up cash: Money invested in HODLing cannot be used for other opportunities, such as diversified portfolios with stocks, bonds, or ETFs. |
Builds discipline as an investor: HODLing encourages resisting fear, uncertainty, and doubt (FUD), promoting a long-term focus. | Risky asset: Cryptocurrencies are highly volatile, and there’s no guarantee that their value will increase over time. |
Alternatives to HODLing
HODLing isn’t the only cryptocurrency investment strategy. Other approaches, such as SPEDN and BUIDL, offer different ways to interact with and invest in digital assets. While these terms are playful send-offs of HODL, their strategies take a completely different approach to crypto use.
1. SPEDN: spending for adoption
The SPEDN strategy emphasizes spending cryptocurrencies to promote their real-world adoption. Advocates believe that using digital assets for transactions—such as buying goods or services—can increase their popularity, driving greater utility and potentially boosting their value over time.
For example, in 2025, several businesses, including global brands like Starbucks and Microsoft, will continue accepting Bitcoin and other cryptocurrencies for payments. SPEDN advocates argue that frequent use of crypto in daily transactions could create a feedback loop of demand, driving both adoption and price appreciation.
2. BUIDL: building the crypto ecosystem
BUIDL focuses on actively contributing to the development of blockchain technology and applications. This strategy encourages investors and developers to use their cryptocurrency holdings to fund or create infrastructure projects within the blockchain ecosystem.
For instance, projects like Ethereum 2.0 and decentralized finance (DeFi) platforms have seen significant growth due to contributions from BUIDL-focused individuals and organizations. The underlying belief is that strengthening the ecosystem will enhance the overall value and utility of digital assets.
Choosing the right strategy for you
If you’re exploring alternative strategies like SPEDN or BUIDL, it’s important to consider how they align with your financial goals. Both approaches require active involvement, whether through spending crypto in real-world scenarios or contributing to blockchain development.
For those seeking guidance on shaping their overall investment strategy, tools like Public can provide valuable insights. With access to expert analyst guidance and Morningstar’s industry-leading data, Premium users can make informed decisions tailored to their financial objectives.
By exploring these strategies, you can decide whether to HODL, SPEDN, or BUIDL—or create a diversified plan that incorporates elements of all three.
Comparing HODL and traditional buy-and-hold strategies
HODLing draws inspiration from the traditional buy-and-hold strategy used in stock markets. Both approaches emphasize long-term investment and resilience during market volatility. However, there are key differences—while buy-and-hold relies on assets like stocks or ETFs with historical performance and strong fundamentals, HODLing applies to cryptocurrencies, which are speculative and subject to extreme fluctuations.
This comparison highlights how the principles of long-term investing differ when applied to digital assets versus traditional markets:
Aspect | HODL (cryptocurrency) | Buy-and-hold (stocks) |
Focus | Long-term holding of cryptocurrencies regardless of price volatility. | Long-term holding of stocks or ETFs for capital growth. |
Asset types | Cryptocurrencies, often speculative and reliant on market sentiment. | Stocks, ETFs, or funds supported by fundamentals like earnings or dividends. |
Market behavior | High volatility with unpredictable price swings (20%+ in a day). | Historically trends upward over decades, despite short-term downturns. |
Risk level | Higher risk due to lack of historical benchmarks and extreme volatility. | Lower risk with more predictability, backed by decades of market data. |
Uncertainty | Emerging asset class with regulatory and technological uncertainty. | Established market with strong regulatory frameworks and financial systems. |
Emotional selling | Discourages selling during crypto price dips despite extreme fluctuations. | Discourages selling during stock market downturns to capture long-term gains. |
Historical evidence | Limited history to prove long-term success; speculative. | Over a century of data supports long-term stock market growth. |
Value drivers | Adoption, demand, and sentiment drive crypto prices. | Tied to company performance, earnings, and economic growth. |
Volatility | Extreme; price swings are frequent and substantial. | Moderate; short-term fluctuations but long-term stability. |
Ideal for | Risk-tolerant investors willing to weather high volatility. | Conservative or moderate investors seeking steady, long-term growth. |
The bottom line
HODLing is more than just a crypto meme—it’s a mindset that reflects the commitment to long-term investment despite market volatility. Whether you choose to HODL, SPEDN, or BUIDL, the right strategy depends on your financial goals, risk tolerance, and time horizon.
If you’re willing to embrace the risks of crypto’s volatility, HODLing can be a viable option, especially when paired with strategies like dollar-cost averaging or diversified investments like cryptocurrency ETFs. For those seeking more active involvement, SPEDN and BUIDL offer alternative ways to engage with the crypto ecosystem.
Ultimately, successful investing requires careful planning, research, and alignment with your personal objectives.
Frequently asked questions
What does FUD mean?
FUD stands for fear, uncertainty, and doubt. It’s a feeling many crypto investors have during a downturn. Oftentimes, other investors will suggest HODLing as a solution to FUD.
What does HODL stand for?
HODL is a misspelling of hold and an acronym for hold on for dear life.
What does HODL mean?
The HODL strategy, also known as buy-and-hold, involves buying an asset and holding onto it, even if the market becomes unstable. HODLing is based on the idea that, historically speaking, the market will ultimately trend upward.
Is it good to HODL?
Depending on your investment strategy and risk profile, HODLing can be a good approach. However, crypto markets are highly unstable and there is no guarantee that HODLing will be successful.
What is the HODL meme?
The HODL meme started as a post by a user on the Bitcointalk forum. The post, which expressed frustration over his inability to play the markets, started with the infamous line I AM HODLING.
How do you say HODL?
Since the term originated on the internet, there’s no single correct pronunciation. Some people say HODL like hold, while others say ha Dell or Hod Dell.
What does HODL mean in trading?
HODL is a popular term in cryptocurrency trading that means holding onto assets instead of selling them, even during market fluctuations. It originated from a misspelled word for “hold” in a Bitcoin forum post and later became an acronym for “Hold On for Dear Life.” HODLing is a long-term investment strategy where traders avoid short-term price movements and believe in the future value of their assets.
Can You HODL stocks?
Yes! While HODL originated in crypto, the concept applies to stocks too. By holding stocks long-term, especially stable blue-chip ones, investors can ride out market downturns and avoid the temptation to sell during declines. This approach helps weather short-term instability and benefit from long-term growth.