Remember to HODL


There’s a crypto-meme about hodling that everybody should know, because it’s a great lesson, not just for newbie crypto investors, but for all investors.

Before bitcoin’s recent quadruple-bear market (yes, it went down 20%, then down 20%, then down 20%, then down 20%, and briefly, down another 20%), there had been a lot of volatility, even if it was much less publicized. Yes, it makes 1000 point Dow losses look like child’s play.

Different reactions:

There are bunch of very human reactions to volatility in markets, a few among them:

  • Holy shit, sell everything [bad]
  • It’s time to put this cash to work [usually excellent]
  • I haven’t checked my statement in years [probably pretty good]
  • HODL [okay]

Genesis of HODL:

Mr. HODL’s famous quote takes us all the way back to 2013.

To give you a sense for what bitcoin was doing, another chart:


December 18, 2013, 10:03:03 AM

I typed that tyitle twice because I knew it was wrong the first 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 bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.

so i’ve had some whiskey
actually on the bottle it’s spelled whisky
sue me
(but only if it’s payable in BTC)

It’s important to remember that these are the real kinds of emotion we’re dealing with when markets go way down. And most people do not have the fortitude of Mr. HODL. When the market goes down and there is all kinds of selling, people like to ascribe a cause to it. It is part of the human condition that we must absolutely be able to draw a neat line from A to B. CNBC will literally take any piece of news that happened on the day the market did anything else, and as long as the news happened beforehand (and sometimes even this is a stretch) they will say “A leads market higher” or “market falls on news of A.” It’s all a big joke, and you aren’t in on it.

This is really how the average trader/investor/whatever they call themselves thinks. They think there are “smart” traders who buy every dip and sell before every decline. When the market starts to go sideways they totally lose their minds.

I salute you, Mr. HODL, for giving us a real glimpse into your psyche. It was beautiful, and like an eclipse, if we look too long, we’ll probably go blind.

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