Why You Shouldn’t Bank On Getting Rich Quick – The Art Of HODL


Many people buy Bitcoin expecting quick profit and if they can’t, they look for trading strategies to achieve insane profits in the short term. People look for these strategies because it is difficult to think about the long term when you’re not sure about the power of its fundamentals. In this path, they end up listening to traders or gurus from the internet that claim to know when you should act.

Risks of Day Trading

But actually, when it comes to day trade or short-time investments, a study from NASAA shows that the probability to lose money is way bigger than to win, that way 7 out of 10-day traders lose money. Besides that, another study published in June of 2020, where they observed traders who began between 2013 and 2015 in Brazil, which is the third in terms of volume in the world. Their conclusion was that “97% of individuals that persisted more than 300 days lost money.”

With that being said it’s clear that the way for profit is consistency and not day trading, actually most of them that make money, do that by selling promises of enrichment through their online courses. Or they are actually part of the 1% top population of traders, and if that’s the case they actually study a lot and non-stop, it takes years and a lot of discipline to do be in this little group of successful traders.

A Look at HODL

If you want to invest without being worried about charts and prices etc. Here’s why you should just HODL:

First of all, we can imagine how much it will grow by looking at the Bitcoincurve of adoption:

Font Bitcoinist

This type of adoption graphic can be used in any new technology, it can measure, for example, internet adoption through the years. In this case, it’s Bitcoin that we’re looking into. We are still at the beginning of it, in the early adoption phase, which means we still have a long path ahead.

If you’re a visionary maybe you should now start to think about the historical Bitcoin growth. If you look back at its prices you can see that in the long-term Bitcoin has always been growing.

As you can see, despite the fact of high volatility the asset had an incredible performance through the years being now the third largest currency in the world, it’s just too big to ignore.

The Main Reasons for Bitcoin Price Changes

When we think about the high in Bitcoin it’s all about market cycles, so in 2017, the first pump you can observe in the historical price graphic, it’s due to the event of halving, which caused FOMO, the fear of missing out. So, when the price goes up and up and doesn’t stop, is when people start to look at this asset and wonder why they haven’t bought it before.

This is all related to its highs, and as the rewards for the miners are cut in half, it is less worth it for them to miner Bitcoin, which is also related to the halving of 2020, and the big pump and all-time high prices. In 2024 we’ll have another halving, so you better be ready for that because the cycle will repeat itself.

Besides that, of course, we can talk about speculations, for example, when Elon Musk first declared that Tesla would accept Bitcoin, we had a spike of 16%.

When we think about the drops, first you should remember that everything that goes up also goes down, so after the big pump in 2017 and the global euphoria, it had a 70% drop, which was the end of the bull run.

Another abrupt drop was the beginning of the COVID-19 in March of 2020, when the whole market went down, which was compared to the 1929 crash. But Bitcoin was the first asset to recover, and since the May halving, prices exploded, initiating the bull run we are in now.

Furthermore, these types of sudden drops are a clear example of how sometimes the market just goes against traders. But not against the long-term holders, because the losses only happen when the individual decides to sell it.

A Closer Look at Bitcoin

Now, with all the context on Bitcoin, you’ve already heard how this asset can be considered digital gold, here are some of the reasons:

  • It is deflationary, because of its limited supply of coins, Bitcoin such as gold has this characteristic of scarcity. Therefore, when we think about supply and demand, the tendency is to always increase.
  • It is decentralized, gold supply doesn’t have an owner, and with Bitcoin is the same, you own a Bitcoin-only when you have it in your wallet.
  • The difficulty of confiscation, and that’s because they are isolated from the larger system as a whole.
  • Anonymity and privacy in how you spend our money.

Besides that when we look at Bitcoinprojections in the future, we can consider that more people will be using it, especially if they make it easier to use, through a phone with a lightning network, for example. Or even better, when Visa starts to accept it, and the mainstream wakes up to this blockchain technology, as the demand grows the supply decreases, and the prices go up.

Moreover, since some people just believe when they see it, there is a methodology to buy Bitcoin, that consists in buying a little bit per month to achieve a dollar-cost averaging. In that way, for example, if you had bought $100 per month for the last three years, you would’ve invested $3,600 and because of the Bitcoin appreciation, you would’ve had a total of $19,490, mind-blowing right?

Finally, to be an official HODLer, you need to know why people keep spelling this word wrong. This guy shared his sad story in Bitcointalk with trading and typed “I AM HODLing” and why he decided to start being a HODLer, and the rumors are that he was drunk while writing that, people liked it and adopted it, and now this phrase is really famous inside the crypto market.

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