As we are in the Bear Season, in which the Crypto market is facing a downtrend, Investing in Bitcoin is the easiest and most secure way of making money with crypto. As it has a long history of operating on the market and being impossible to overthrow by any other asset, worldwide adoption may be closer than it seems.
Working with Bitcoin is more challenging than it seems because investors must seek ways to fight the increased volatility and uncertainty around cryptocurrency. While there are many ways to make money and avoid losing a considerable amount of value, many people say that hodling is the best strategy. Here’s why.
DEFINITION OF TERMS; HODLING & WHY IT IS CALLED THAT
The term of this strategy originates from a famous investor who misspelled the word on a post on the internet, and this is where the word started to acquire real meaning. While some thought of "HODL"as an acronym for “hold on for dear life,” others simply thought HODL is a funny word that describes a complex situation.
In other words, hodling is where investors hold their Bitcoin for as much as it’s possible in an attempt to fight volatility. Considering that it’s getting more difficult to predict the cryptocurrency’s price, sometimes it’s better to keep the coins for a longer period.
The strategy is simple, yet it takes a lot of patience to provide solid results. Investors must buy Bitcoins and hold them for years until their values reach considerable heights and can be sold for a better price. This method decreases risks and exposes investors to volatility less, but it requires them to keep the coins even during market crashes.
It may be one of the most challenging strategies for investing in Bitcoin because some serious psychological concerns are involved here. In crypto, the concept of FOMO is frequently used to express investors’ fear of losing their coins or their value when the prices increase. This fear of missing out is hard to control and is the leading cause of impulse buying and selling Bitcoin because the uncertainty of the market causes people to jump to conclusions and take sudden actions
WHY HODLING IS PREFERRED TO ANY OTHER STRATEGY
Hodling has numerous benefits that make it better than day trading, such as the following:
▪︎Investors don’t have to be on top of the news all the time
▪︎ Investors are not in danger of being affected by cryptocurrency volatility
▪︎Investors can yield significant results in the long turn and with less risk
IN CONCLUSION; Bitcoin hodling is a strategy that involves continuous storage of bitcoins as a way to mitigate volatility and make considerable returns. While this method takes a lot of time to show tangible results and requires patience, it is one of the safest and most solid ways to take advantage of Bitcoin
At the end of the day, this strategy only minimizes the chances of volatility interfering with the assets’ values, but it doesn’t eliminate its occurrence.
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