The HODL meme explained: what does HODL mean?

“HODL” is a meme that's been a staple of the cryptocurrency community for longer than most digital assets have existed. It simply means to “hold” an asset — i.e., to keep exposure to it — long-term, even when its price is falling. There's nothing particularly deep or complex to grasp about the term, and it originated as a typo by an early Bitcoin investor on a popular BTC forum.

In this introduction to the HODL meme, we explain exactly what HODL means, where it came from, what it doesn’t mean, and why it's become such a symbol within the digital currency industry.

What does HODL mean?

HODL is simply a misspelling of “hold,” and it refers to the act of not abandoning a buy position in digital assets in the face of declining prices. For the reasons we'll discuss later in this article, HODL has become one of the most enduring examples of crypto slang and, despite originating in 2013, is still widely used today.

Like many memes that have thrived in crypto, there isn’t anything particularly profound about HODL. In fact, it's likely in part because of its irreverence that the phrase remains in everyday use today.

Cryptocurrency enthusiasts still use the term HODL almost a decade after its first use. Source: X

Where did HODL start?

Bitcoin Talk forum user GameKyuubi first used the term “HODLING” by accident during a drunken rant in late 2013. The BTC price had just plummeted from $716 to $438 when they titled a post “I AM HODLING” before starting their outburst. A self-confessed “bad trader,” they had decided that holding their BTC was a more profitable investment strategy than risking losing it by trying to time the market.

GameKyuubi’s post reads:

“I type d 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.”

The early Bitcoin community latched on to the sense of panic and intoxication, as well as GameKyuubi’s assumed conviction that the BTC price would eventually recover. What originated as a drunken typo has become part of enthusiasts’ crypto slang, encouraging bad traders to follow GameKyuubi’s strategy if they share the same conviction.

The term HODL represents a shared mindset in the crypto community that Satoshi Nakamoto’s creation and other cryptocurrencies are the future of economic interaction. Hodlers aren't afraid or bothered by short-term price swings in either direction and don't generally attempt to trade.

GameKyuubi’s signoff summarized what would become the HODLers position neatly:

“In a zero-sum game such as this, traders can only take your money if you sell.”

The original post in which GameKyuubi used “HODL.” Source: bitcointalk.org

A common misconception — HODL isn't an acronym

Some crypto enthusiasts believe that HODL is actually an acronym for “hold on for dear life.” However, the term’s first usage clearly shows it to be a simple drunken typo.

The meme itself is also less potent using the interpretation that it’s an acronym for “hold on for dear life.” Although holding BTC through extreme market movements can be a hair-raising experience, the acronym explanation conveys a sense of fear and uncertainty rather than an image of an intoxicated Bitcoiner that's so convinced of their positions that short-term price swings are irrelevant to the bigger picture.

GameKyuubi’s post demonstrates this absolute conviction. It seems to make no odds to them that their girlfriend has all but left them or that the BTC price is plunging. They appear to fully believe that their strategy is more likely to be more profitable than attempting to trade market movements.

The meme also paints the image that GameKyuubi is absolutely prepared to ride their investment to nothing if it comes to that. It’s this conviction that many cryptocurrency enthusiasts claim to possess today, and this is why the meme remains a famous example of crypto slang.

Why do Bitcoin traders love the HODL meme?

Bitcoin traders are rarely qualified professionals or experienced traders. Timing such a notoriously volatile market can be challenging, and news events can spread fear, uncertainty, and doubt among even the most convicted. Under such conditions, it can be tempting to panic-sell BTC when the price looks at its bleakest.

Memes like HODL create a sense of a community that sticks together through the good and the bad. Knowing — or at least thinking — that many others share the same conviction is comforting for many crypto enthusiasts and helps strengthen their own resolve in their trading strategies.

How to HODL crypto assets

HODL is just another word for long-term positions. It’s by far the most straightforward digital currency strategy because it requires minimal subsequent action from the trader.

To HODL a cryptocurrency, you first need to buy some digital assets. You can do so at exchange platforms like OKX, Bitcoin ATMs and even on platforms like PayPal.

Since you have no intention of selling in the short term, the safest place to hold your crypto assets is in a wallet to which you control the private keys. When using an exchange like OKX, you can immediately withdraw your holdings to a noncustodial wallet, giving you absolute control over the funds. Some platforms that provide cryptocurrency exposure don't allow users to withdraw and, therefore, make a poor choice for a long-term “HODL” strategy.

While leaving a buy position open on an exchange is very convenient for many people, it has a significant drawback — you must trust that the exchange will eventually allow you to sell or withdraw your holdings. There are multiple reasons why the platform might be unable to do so, including the exchange being hacked and losing customer funds, or regulations changing to prohibit users from withdrawing.

If you want to HODL for the long-term, you should consider setting up a secure noncustodial wallet. You can learn more about self-custody by consulting these OKX wallet guides.

Dollar-cost averaging and “stacking sats”

Dollar-cost averaging is a popular strategy among the “HODL” crowd. Essentially, it involves committing a small amount of your regular income to buy an asset in which you have absolute long-term conviction.

The idea is to remove short-term market movements from discouraging you by buying at a regular interval, regardless of the price. In fact, those dollar-cost averaging into BTC often appreciate a downward price swing, as it enables them to add more BTC to their stack for the same cost in fiat currency when making their DCA purchase.

Dollar-cost averaging is such a popular strategy it's given rise to another piece of well-established crypto slang: “stacking sats.”

Sats — or satoshis — are the smallest unit of BTC. There are 100 million sats in 1 BTC, meaning each sat is 0.00000001 BTC. You can think of sats like you would pennies compared to a dollar or pound. The stacking sats meme attempts to shift the focus from whole Bitcoins to collecting smaller units, as there is still a widespread misconception that you can’t buy a fraction of a Bitcoin.

OKX has produced a detailed guide that explains how to dollar-cost average and the advantages of the trading strategy.

Should you HODL crypto assets?

Before you trade, you should always research exactly what you are buying. Avoid getting swept up in the hype commonly witnessed in the crypto industry and instead purchase the projects you have confidence in. You should beware of influencers giving financial advice on social media channels, as they're rarely qualified professionals, and some may even attempt to drum up interest in a crypto asset they hold in order to cash out at a higher price.

If you decide to trade crypto, HODLing is the most straightforward strategy. After buying, you can simply forget about your holdings for months or even years. Historically, those that have held BTC for more than a few years now hold Bitcoin worth many multiples more than their entry price. That's not to say the overall upward trend will continue — and we’re not qualified to give financial advice — but if history repeats, HODLers will undoubtedly be very happy with their choice.