In 1987’s Black Monday stock exchange crash, Sam Walton, the world’s richest man, lost quite half a billion dollars during a few hours.
When reached for comment, Walton said, “It’s paper anyway. As far as I’m concerned we’re focusing totally on the corporate doing well and taking care of our customers.”
He didn’t care about dollars; he cared about his asset Wal-Mart, and he still owned that.
History of the #HODL
In bitcoin’s volatile and roller coaster past, “HODL” was the meme that bound the cryptocurrency community together. It stood for the proposition that we all believe the longer term of bitcoin. It’s both funny and insightful.
Here is that the original post by GameKyuubi on a Bitcoin Talk forum (spelling errors and profanity included):
I AM HODLING
I type d that tyitle twice because I knew it had been wrong the primary time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a nasty trader and that i KNOW I’M a nasty TRADER. Yeah you good traders can spot the highs and therefore the lows pit pat piffy wing wong wang a bit like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S taking place I’M GONNA SELL he he he then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING repurchase in but you recognize what? I’m not a part of that group. When the traders repurchase in I’m already a part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH you ought to HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL and purchased MOMENTS BEFORE EVERY BUY BUT you recognize WHAT nobody IS AS COOL AS YOU. you simply sell during a market if you’re an honest day trader or an illusioned noob. The people inbetween hold. during a game like this, traders can only take your money if you sell.
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
(But as long as it’s payable in BTC)
It was not about bitcoin versus bitcoin cash or 1,000 other cryptocurrencies. it had been bitcoin vs. the planet and that we ALL embraced it.
It only took 11 minutes for this post to become a meme that became the rallying cry out for the whole crypto world. We were all on an equivalent rollercoaster ride and GameKyuubi, within the depths of his frustration, had (sort of) elegantly articulated both what it seems like and therefore the best trading strategy for an asset this volatile.
Buy and HODL.
The good traders
GameKyuubi was wrong about just one thing: There aren’t any good traders.
There are many us who believe we are good traders. But we aren’t. Of course, a number of the loudest voices on Reddit regularly remind us about how well they time the market. Except once they don’t time the market well.
A paper published last October by the Haas School of Business at UC Berkeley entitled “Do Day Traders Rationally study Their Ability?” used nearly 15 years of stock exchange day trading data to conclude that each one day traders are irrational, the overwhelming majority of day traders lose money, and even when day traders are successful, they “irrationally attribute success disproportionately to their ability instead of luck.”
This sounds exactly just like the crypto trader. Any post you see mocking HODL is probably going someone who thinks they’re really smart because they made money by trading crypto last year.
Of course, their success was thanks to their unique trading ability and not the very fact that the whole market rose sort of a rocket.
Still, empirically, even in volatile assets like bitcoin, carefully choosing an asset and holding long-term positions has proven to supply the simplest return.
Warren Buffett, the foremost successful investor of recent times, has often said that he only invests in what he knows. His preferred holding period: forever. thereupon model, his company, Berkshire Hathaway, has averaged a 19 percent annual return since 1965 which suggests it’s risen quite 1 million percent.
Theoretical models that assume participants know when markets will move against them offers better returns but, in practice, market movements can’t be reliably predicted so even when people like Bernie Madoff attempt to make us think that they’ve figured it out, they haven’t.
Long-term investment in quality assets remains the sole reliable investment strategy.
Simply put, HODLing works.
For those not curious about limiting their activity to HODLing, there are two new and useful ideas that have begun bouncing around that basically do advance cryptocurrencies: #BUIDL and #SPEDN.
BUIDL has been wont to help remind us that, within the words of a CypherPunk’s Manifesto, “Cypherpunks write code.” so as for the blockchain to actually be useful and valuable, we’d like to create stuff thereon . Watching the worth go up and down either as a trader or a HODLer does nothing to form bitcoin work better.
We need to make a number of the promised applications which will really change the planet . To date, the blockchain community has fallen short during this regard outside of the areas of payments but there are some real wins.
Just this weekend, Voatz, a Medici Ventures portfolio company is running party county convention voting in Utah, state convention voting in Michigan and state primary voting for overseas and military voters in West Virginia , all on a blockchain platform.
Blockchain voting may be a simple application, but it’s one which will bring a much-needed security and transparency to elections. and that we do it now.
SPEDN may be a nod to the various folks who realize that, for bitcoin to be useful, we’d like to be ready to spend it to shop for things. and that i mean everything. It really doesn’t matter whether it’s through second-layer solutions like lightning or forks like bitcoin cash; we’d like more ways to use cryptocurrencies in real-world transactions.
A focus here, instead of complaining about HODLers would be helpful. we’d like more merchants to simply accept cryptocurrency before it becomes useful. Options to spend bitcoin remain severely limited in most areas and this may ultimately limit bitcoin’s value.
As for me, i will be able to HODL until I can purchase useful stuff and SPEDN.
This year has seen intense regulatory pressure on cryptocurrencies and its time we stop pretending that HODL was stupid. It isn’t and it wasn’t. Anyone who doesn’t just like the HODL mentality must give HODLers something else they will do with their bitcoins.
Trading is not any solution for intelligent people. What we’d like are new ways to use cryptocurrency.
We need BUIDLers and merchants who will allow us to be SPEDNers.