Having a HODL mindset suggests that a crypto investor has long-term aspirations for the chosen assets they're holding in their portfolio, expecting that they will steadily increase in value over time. In the Decentralized Finance community, the term "diamond hands" has a similar meaning.
HODLing is both an investment strategy, and in my view, a mass delusion that allows for the average investor to end up as exit liquidity for other more savvy investors. If you look at the history of cryptocurrencies and how many have come and gone, more often than not, the HODL mindset will land you in the poorhouse, especially for investors who don't know what they're investing in and rely on hype alone as their metric for sustainability.
Is HODLing a good long-term approach to Bitcoin investing? What about other cryptos?
After spending years in the cryptocurrency and decentralized finance space (since 2012), I've seen how the market operates and I think that the HODL mentality only makes sense when looking at things from rose-colored glasses. Again, when looking at the vast majority of cryptocurrencies (or NFTs for that matter), the HODL mindset ends in tragedy. Even looking at something like Bitcoin which has increased considerably in value over time has experienced historic highs and lows. Anyone who buys at the wrong time and holds onto it for too long can lose considerable chunks of their investments. And with less reputable tokens, entire life savings can be wiped out because the HODL HODL HODL chant inside one's head clouds their judgment. In reality, the crypto market experiences spikes and dips, and the best way to approach the HODL mindset is to look at both the long and the short term. If you believe in the long-term viability and expansion of assets like Avalanche, etc., the best course of action is to buy, hold, sell high, watch the market, buy back in, hold, sell, buy back in. This allows you to continually hold assets while accruing more as the market fluctuates. It WILL happen and those who plan accordingly will end up much better off than those who let things sit around collecting dust. However, if you feel like you're in it for the long haul but don't want to be actively involved in the day-to-day market, you may get lucky and realize great returns later down the road.
Final thoughts on the HOLD mentality:
Ultimately, I tell most investors "the minute you start feeling like a genius, sell!" You can always buy back in at a later date when things dip, and in reality, no matter how high your portfolio's value climbs, it's never worth anything unless you sell and realize gains or are able to find legitimate use cases for your assets. It's very likely Bitcoin will continue to increase in value but expect a bumpy road along the way. If you're a true believer in the HODL mentality, I suggest looking into reliable assets which have stood the test of time like Bitcoin and Ethereum, and now that Ethereum is using a proof of stake consensus model, it's a great idea to engage in staking of assets to earn a stable, safe, reliable yield on those assets. This makes the HODL mentality pay off in more ways than one, as you can earn additional yield while also hoping that those assets increase in value over time. Using liquid staking services provided by protocols like allow for lower-level investors to do so with ease, and do so through their favorite protocols, increasing the level of trust they have at those returns. In my opinion, this is the best route to go. Otherwise, look to sell when prices are high and buy when they are low. And don't think this strategy doesn't apply to those HODLing and staking as well. You can apply this strategy as well, and as long as you are in it for the long term, there's a good chance you'll reap the rewards.
