What it means to ‘hodl’ and ‘cost average’

Passive Ownership is quite a mouthful, luckily the Bitcoin community has adopted a simpler and much more relevant equivalent – hodling.

It has become one of Bitcoin’s defining memes. You can read the story of hodl in the Learn Crypto blog and how it became the crypto community’s defining meme.

Hardcore hodlers wear this title as a badge of pride. Hodling bitcoin doesn’t mean keeping it in your wallet forevermore: it simply means resisting the temptation to sell during periods of volatility.

What does hodl mean?‘Hodl’ is simply a deliberate misspelling of ‘hold.’ If you hodl bitcoin, it means you are storing it in a wallet and are in no hurry to sell it.

Buying bitcoin, and hodling to accrue long term profit, sounds like the easiest thing in the world. In fact, it’s surprisingly hard to resist the urge to cash out, both when the market is rising or falling, or to feel that you can second guess the volatility and make more profit by actively trading the ups and downs.

Trading requires a very specific skill set and involves much more significant risk. Learn Crypto even dedicates an entire separate section to explaining what is involved in trading cryptocurrency.. 

Hodling simply requires patience, and though it is the antithesis to the constant search for profitable entry and exit points that trading requires, it does however, require a single crucial decision of when to enter the market and access to a lump sum investment.

If you don’t want to commit to one single purchase, or don’t have access to funds to do that, there is a very sensible alternative to deciding on a single point of entry, known as cost averaging.