There are many resources on the Internet that give you tips and advice on cryptocurrency investments.
However, not all advice is equal and there’s a lot of bad crypto advice out there.
But which one is arguably the worst?
HODLers can buy crypto in a bull market because the current price doesn’t matter in the long term.
Well, let’s discuss why this advice is so bad.
First of all, what is HODLing?
HODLing is a crypto investment strategy that involves buying crypto coins and holding them despite market movements. It is comparable to the buy and hold strategy used in traditional markets.
So why is this advice so bad?
The first reason is that the future of crypto coins is still uncertain. When Bitcoin was launched in 2009, it was just a highly speculative asset that was associated with fraud, the Draknet, terrorist funding and so on.
However, at the time, there were many people who believed in the great potential of Bitcoin and cryptocurrency overall. They supported this innovation with the hope of a new technological revolution.
Nowadays, more and more institutions and governments are testing and researching cryptocurrency and blockchain. Crypto-assets are becoming increasingly institutionalized, the adoption rate is increasing and this adds to the potential of crypto coins to stay around for the long-term.
On the other hand, we still can’t be sure. Investing large amounts of money into something as unstable as crypto can be dangerous. Of course, you can still do it but only after carefully considering all the possibilities of things going wrong. Blind faith never leads to good consequences.
Moreover, this isn’t reasonable for the short term.
Cryptocurrency is very unstable and buying it when the price is high is very risky. For instance, many people jumped on the Bitcoin bandwagon in late 2017 when the prices were increasing at an extremely high rate. They were told to HODL Bitcoin since it would soon reach $1 million. As a result, all HODLers checked their coin tracker seeing how their portfolio value quickly declined and they were left with great losses with no one to blame but themselves.
Crypto will probably reach the same heights again but the crash had devastating consequences for many people.
Overall, HODLing is a great strategy for crypto investors, because it works. Yet, it is not as simple as buying coins whenever you wish and then keeping them for the rest of your life. If you want to hold your crypto coins but don’t wish to lose all the money you stored, it is best to buy during a bear market and set a price point when you exit the market to prevent losses as much as possible.
If you want to track your HODLings easier, just use a crypto tracker to make life easier. If you aren’t sure how to use them, just check out this thorough cryptocurrency portfolio tracker article.