Origin of HODL
The term “HODL” came from a misspelling in a December 2013 Bitcointalk (popular Bitcoin forum) post “I AM HODLING” where an inebriated poster rants about how bad he is at day trading and should just hold versus give into his fear and fomo. HODL represented a rally cry or coping mechanism that helps humans whether Bitcoin’s volatility.
(Note: HODL does not stand for “Hold On for Dear Life” - that was made up by mainstream media)
After being in Bitcoin for over 10 years, learning proper stress management/fully understanding the investment is how I survived one of the most volatile assets in the history of humankind. Or in other words, how I HODL.
Before we jump into the various ways you can learn how to HODL harder, I wanted to give you a taste of what it was like to HODL this long. Check out this video:
Pretty wild huh?
Imagine all of those drops, the feeling of despair as it dips.
Will this be the end of Bitcoin? Was I wrong with this investment?
In the rest of this newsletter, I’m going to dig into methods that I used to help me HODL this long :)
Mind + Body
Our minds and bodies are intertwined. There is no separating them.
Working out helps.
Talking to someone helps.
I just had a recent tweet about my own self-discovery of finding a balance with my mind and body.
Finding happiness/success in other places
You need to find some other outlet or measure of happiness/success rather than just Bitcoin’s price.
For example, enjoying time with family and friends. Measuring happiness as your relative closeness to them.
Or you could have a hobby that isn’t tied to Bitcoin’s success like woodworking or knitting.
Reducing exposure in other ways
So you’re a dedicated HODLer and you never want to sell. Well if that’s the case and you find yourself too stressed out, then you may want to consider stopping new purchases of Bitcoin and instead putting that in someone that is boring/has a low return for peace of mind.
Trust me, I get the confliction. I have nearly my entire net worth in Bitcoin because I believe that there is a ton of upside. And I’m still buying Bitcoin.
But if you think that having *something* else will help you sleep at night, then by all means do what you think will help you.
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Fully understanding the investment
Have a Plan/Investment Thesis
With anything in life, you might want to consider developing a plan before you do something major. With investments, you should have the same mindset.
When entering into a new investment, you should think about why you are entering the trade, what edge do you have (why is everyone else wrong about this), and if you’re right - when you want to get out.
I commonly see this with altcoins. Let’s say an individual buys an altcoin at $100. Then it rises to $200 and they HODL because they expect it to go higher.
Then it dips to $100 and they keep thinking about when it was at $200 so they HODL.
Then it goes below $100 and they HODL hoping to get their principal back.
If instead, they had a plan to take money off the table at predetermined levels because their investment thesis was right, then they could have avoided this scenario.
I bought Bitcoin in 2012 with the thesis that Bitcoin would one day become “Gold 2.0” or a world reserve currency.
With Bitcoin, the TAM (Total Addressable Market) for that thesis is $10T - $100T. Right now Bitcoin is only at an $686B market cap, which means that I’m not selling, I’m waiting for it to finally hit my investment thesis before I’d even consider that (Note: with Bitcoin, I don’t plan on selling. I plan on either borrowing against it, or lending it to earn a yield).
The below chart is very outdated but gives some scope to the TAM of Bitcoin.
When in doubt, zoom out
After getting into a new investment, the urge will be to constantly check the price. When it dips, you may feel that pit of fear or want to take our money off the table.
By zooming out, we now have context. A “big” dip at the moment may seem like it’s devastating, but if we zoom out we see that this is a common occurrence.
When I first bought Bitcoin in 2012 I didn’t fully understand how much of it worked. After the 2017 bull run, I poured over Bitcoin content, looking to expand my understanding of the various nuances.
That’s when I decided to start writing up my discoveries, which was one of the reasons that led to me being well known in Bitcoin.
HODLing isn’t just a rallying cry for Bitcoin, it’s an investment philosophy/lifestyle.
Be careful and methodical with how you choose an investment, stick with it until it either fulfills your investment thesis or doesn’t over a reasonable period of time, and work to emotionally distance yourself from it.
You’ll need mind + body to be in the right spot to survive HODLing :)
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Hi Dan, thanks for the Held Report. I've started writing feel-good poems for the community. Let me know what you think of this one?
Hi Dan, love your continued outlook and push for adoption. How would you recommend getting into a crypto related job coming from financial enterprise? My specific experience (over 10yrs) doesn't seem to be available even on Kraken.. can you help me out?