July 25, 2023
When starting to trade cryptocurrencies, you will face numerous ways to participate in the market. You can trade cryptocurrencies using Leverage or hold on to your digital asset for quite a long time. It depends on you and your trading Style. You might prefer to use the Leverage and speculate on price movement rather than buying and owning an actual cryptocurrency. At Aron Groups, we have discussed cryptocurrency trading in detail; now, we will discuss holding cryptocurrency as another strategy.
Link cryptocurrency is perfect for people who want to save for the future. Saving was all well and good, and there is no problem with that, but saving traditional currency doesn’t result in more profit. Then you are holding cryptocurrency, you are saving and at the same time earning a prophet for it. Thanks to holding cryptocurrency, you’re able to use unique financial and language resources to keep your values in a safe place. Then you’re talking about cryptocurrency. Everything is new. There are a lot of completely new Concepts.
Here we will talk about everything about holding cryptocurrency, so no matter how experienced or inexperienced you are in the cryptocurrency market, you should continue reading this article.
Table of Contents
History of Hodl?
HODL The result of Miss spelling of “hold” in the cryptocurrency market. The term was first used in 2013 in an online post. At that time, the price of Bitcoin was very volatile. It Raised the 2 over $950 to fall at $130 in every of the same year. The online post told people not to sell their Bitcoin and just” HODLing” it. To put it simply, holding cryptocurrency means buying and holding indefinitely. Using this strategy, you won’t sell your digital asset when the market drops or becomes volatile. The term implies that you would only sell your digital asset when the market is downtrend. In this case, you are a good day trader. Otherwise, you should stick to your digital asset and hold it because when the market is rolling a tie, people and traders can only take your money if you sell it; otherwise, it all wheels to decide.
What Does HODL Mean?
It has true to say that the birth of this concept resulted from the extreme volatility of the market; if you have been in the cryptocurrency market long enough, you know that crypto market is known for being extremely volatile, which is a big problem and can cause huge losses to cryptocurrency investors.
It is true that this investor normally takes benefit of these insane rises and falls in the market and makes many trades in the short term to make quick profits.
But on the other hand, other types of investors in the cryptocurrency market would rather go for a smooth and risk-free strategy. These people care about long-term profits and try to get the maximum benefit from the cryptocurrencies they own. This strategy is known as holding or holding cryptocurrency.
Now it pays holding cryptocurrency is a real thing, and it is a strategy many investors prefer to use. When using this strategy, you maintain a position in the digital asset or cryptocurrency, no matter how the market acts. In fact, despite market fluctuations, you keep Holding your digital asset.
This is one of the best long-term investment strategies Focuses on acquiring and holding cryptocurrency in a wallet. The true objective of this strategy is to create profits by re-valuating the cryptocurrency you are holding into your valet. It has proven to be the safest and the most fruitful strategy when it comes to investment.
Benefits of Hodl
As we have said earlier, holding cryptocurrencies is one of the safest and best strategies if you want long-term profits. It is not only an excellent alternative to other strategies but also provides many benefits and Solutions that will solve the market’s main problem, which is cryptocurrency’s volatility. When you are holding cryptocurrency, you’re ignoring the price movement in the market, which means the market’s volatility doesn’t affect you or your digital assets unless it results in the reevaluation of the asset you are holding onto and changing its price. Here we are going to talk about some of the most important advantages of holding cryptocurrency:
When investing in cryptocurrency or any other type of market, the level of your control on investment risk matters the most. When holding cryptocurrency, you can control and manage the risk involved in the cryptocurrency market. By buying and holding onto your digital assets, the risk of losing your entire investment due to the market’s high-roll utility is as small as possible.
Use the market volatility to your advantage.
It is the first and the only time to take advantage of market movement and multiply your profit. All the time, investors are worried about democratic volatility and keep monitoring the prices to avoid the risk of losing their entire investment, but when you are using a holding cryptocurrencies strategy, if the price of your cryptocurrency Rises, you can sell your cryptos and make profits on the other hand, if the price of cryptocurrency Falls suddenly, there is nothing to be worried about you can only buy more crypto and increase your portfolio and wait for the perfect time to sell it all. one can say holding cryptocurrency is a perfect strategy for people who are not looking for trouble.
Most of the time, investors use this strategy when the price of the currency is going up; in this case, they can obtain long-term gains. By holding onto your digital assets, you’re investing in its future and for long-term profits.
Be in charge of your wallet
When you use a holding cryptocurrency strategy, you have full control over your portfolio, meaning you can decide when to buy and sell. There is no timeline for the mutual fund, and you don’t have to wait for the manager’s decisions; you are responsible to the side for your digital asset.
This strategy provides you with more investment flexibility. For instance, if the price of a cryptocurrency rises, you can either decide to sell and make a profit or continue holding the position for more profit.
With holding strategy, you are paying a commission for the purchase and cell phone actions you will carry out. For instance, if you buy a certain amount of cryptocurrency, hold it for a while, and then sell it, you will pay commissions twice. On the other hand, traders are making enormous trades quickly to make quick profits, and they have to pay more commission because they are carrying out more transactions
Important note to keep in mind
Remember, not every strategy is built for every Trader. Even a great strategy like cryptocurrency holding is designed for only some people. To make the most out of this strategy, you must be patient because if you want to enjoy the prophet, you will have to wait a long time. If you are a patient Trader, this strategy is perfect for you.
Best time to hold cryptocurrency
The best time to hold cryptocurrency is whenever you want. Whenever you find an interesting cryptocurrency, buy it and hold on to it. And if you are a true Believer, you will hold on to your tokens no matter what happens in the market; nothing’s changed for you whether the market crashes or becomes extremely volatile. You continue holding. Everything is about belief. If you believe in the long-term prospects of blockchain technology, cryptocurrency, and related products, you will have any problem holding onto your cryptocurrency for a long time.
What is the difference between hold and staking
You might think that taking cryptocurrency is similar to holding cryptocurrency, but there are two different strategies when you are staking; you are involved in acquiring cryptocurrency and keeping them locked in a wallet to receive profit or rewards.
There are similarities in the essence, but when you are staking cryptocurrency, your digital asset or blocked, and you cannot use it freely. Lots of holding cryptocurrency advantages don’t apply here because you’re not in control of your valid you’re not in control, of risk involvement, and you cannot decide when to sell or buy more crypto. You agree to the terms of a staking pool to hold your crypto’s there for as long as you agree to receive a certain annual interest for said practice.
There are similarities in many ways. For example, you will benefit a significant economic Returns over time, both precise and holding cryptocurrency.
Hodl Vs staking
- When holding onto a cryptocurrency, the amount of coin you hold does not increase your actual betting on reevaluating the currency to sell it at a higher price. On the other hand, when you are staking, you will add more coins to obtain more values over time. In the end, a reward mechanism will provide you with a reward for keeping those coins locked within a system for a determined period.
- On the other hand, in some cases taking will result in higher Returns because, based on the staking pool, the reward might be higher, or did market move deposit in your favorite direction? In that case, holding cryptocurrency is not a good idea, but who can say? As you know, predicting the cryptocurrency market is even harder than flying to the moon.
- The holding strategy started with bitcoin lovers in 2009 who have immobilized coins for more than 10 years and are still holding onto them. Just imagine the game they have made during this time. So, comparing the hold strategy to staking, taking is a shorter-term strategy.
- Another difference between a staking cryptocurrency and how the encrypted currency is security matters. When holding cryptocurrency, you are in charge of your cryptos, and you must use a hardware wallet to provide a secure and safe place for your cryptos. On the other hand, when taking, you may use hot wallets that may or may not be under your control. And as you know, hot wallets are more pruned to the theft of funds.
- When you are holding a cryptocurrency, the number of cryptos you are holding doesn’t change. but when you are staking, the number of holes you are blocking in the staking pool will rise even if the price Falls.
- That’s, but not the least difference between holding and staking strategy is simplicity. Holding cryptocurrency is the simplest strategy to apply compared to staking. You need to learn and understand many options and factors before taking. You should know what a liquidity provider is and how your rewards are calculated, so taking this strategy is more complex than the strategy to use so. If you are looking for a hassle-free to strategy, you should go for the hold strategy.
In a nutshell
there are many different strategies to use when dealing with the cryptocurrency market. Still, if you want an easy and safe strategy to enter the crypto market, you should use a holding strategy. And by doing so, you are meant to learn only specific details about blockchain, staking, and even cryptocurrency trading. All you have to do is to believe in blockchain and choose your favorite cryptocurrency, store it in a hard wallet, and wait for the perfect time to sell it at a higher price.
Doesn’t it sound interesting? Stay tuned with Aron Groups to learn more about the cryptocurrency market; the opportunity lies there waiting for you.