Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Bitcoin Dilemma: HODL Or GTHO Now

By Investing.com (Tanzeel Akhtar)CryptocurrencyDec 27, 2017 03:30AM ET
www.investing.com/analysis/bitcoin-hodl-or-gtho-now-200275704
Bitcoin Dilemma: HODL Or GTHO Now
By Investing.com (Tanzeel Akhtar)   |  Dec 27, 2017 03:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
BTC/USD
+1.30%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BMC
+4.05%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
XBT
+0.33%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

by Tanzeel Akhtar

Last week's Bitcoin tumble, which at one point saw the digital currency plunge as much as 30%, as well as continued, head-spinning, daily—even hourly—volatility in cryptocurrency trading has spawned the repeated, mantra-like chant within the crypto investment community of a relatively pungent and very on-point acronym, often posed succinctly as a question: HODL, short for 'Hang on for Dear Life.'

BTCUSD Daily
BTCUSD Daily

Though Bitcoin has resumed it climb higher as of this writing, does buy and hold still make sense? Or is there some cut-off point, below which alarm bells should start ringing, spurring investors to consider an exit strategy along with a new slogan, 'GTHO,' or get the hell out.

Hardcore Bitcoin aficionados remain convinced there's lots more upside ahead. Their enthusiasm continues undiminished and is arguably even more zealous. The recent dip, they believe, was merely a correction before the alt-currency finally pushes past $20K and beyond. Last week's heart-stopping action, in their view, was just business as usual for the highly volatile asset, nothing to worry about here. Panic-selling when prices crash is simply out of the question. Indeed, one hardcore Bitcoin investor told me, “Bitcoin until I die!”

As interest in Bitcoin investing reaches fever pitch, the chants of HODL on Twitter and chat forums increase. Some have likened it to watching a cult in action. There is no doubt that the game changing technology behind Bitcoin is revolutionary and born out of an ideology. But is HODL-ing really a sound strategy?

Ignore the Daily Prices and HODL

According to Marc Kenigsberg, a Bitcoin and blockchain advocate, when you begin to understand the value of Bitcoin long-term, daily prices no longer matter:

"Holding bitcoin is a long-term strategy that requires resilience and courage of conviction but one that I believe will pay off. In that context price dips mean very little, especially since historically every dip has only strengthened the network and price"

Theo Goodman, a betting expert, says:

"You got to know when to HODL know when to FUD* away and know when to dump, you never count your stack, when your sittin in the slack they’ll be time enough for gloating when the dumpings done."

[*FUD means fear, uncertainty and doubt]

Sergey Shenderov, CEO and co-founder of Mom.life, an app with a strong focus on new technology and human behavior, presents a more measured perspective. He notes that HODL is neither good nor bad. As with any strategy it's a matter of personal outlook. In his view, investing success in capital markets is relative and an investment thesis (and horizon) is the key competitive advantage.

In current, extremely volatile crypto markets which are dominated by non-professional retail investors, there's a herd mentality in effect. Shenderov says investors shouldn't panic and that, as with any other asset, greed can be good, but has to be informed by an understanding of the technology and the pricing history of the asset. An investor's strategy should also be limited by the specific volume of capital they're not afraid to lose.

GTHO, Don't Get In, Or Merely Diversify?

Ami Ben-David, an investor in start-ups and co-founder of SPiCE VC, points out that what we saw last week wasn't any different than Bitcoin's past behavior. There has always been a downturn after a major new high he says. There is no new fundamental reason to change one's belief system about the digital currency at this time.

BTCUSD Weekly YTD
BTCUSD Weekly YTD

Ben-David, says:

“If you believe Bitcoin is the new and much improved gold then there is a lot more room for HODL; just sit tight and wait (years). However if you believe it's a worthless bubble - don't get in, because you'll just have sleepless nights and end up selling in panic at a loss. In any case, HODL or not, I always say: don't put in more than you can afford to lose without losing any sleep, and if you have a lot of Bitcoin - diversify, look for crypto alternatives like security tokens that rely on different models to mitigate your risk.”

Is there a line-in-the-sand when an investor should panic and divest?

Ben-David doesn't think so:

“That’s a trick question. As long as there is no external fundamental change, the Bitcoin believers do not panic and do not sell at the bottoms, in fact, many of them won't sell even if there is a negative external fundamental change - and that's the real long term strength of the currency. The non-believers who are just in it for the ride - already sold, maybe at a nice little profit (still at 13K now, it was 7K in November), and will probably buy again at the next high.”

However, he believes it's most effective to be aware of alternatives:

“People should diversify rather than be all in one coin."

Ben-Ami also suggests 'security tokens,' which he says are securities backed against real assets. Though SPiCE VC offers one such token, there are alternatives (the below should not be taken as a recommendation, nor as a solicitation. It's for informational purposes only. Investors should always do their own due diligence before investing in any asset). He says:

I refer to the new wave of regulation-compliant tokens, such as SPiCE VC Tokens, which are securities backed against real assets. In the case of SPiCE, the tokens are backed against the fund's investment portfolio (investors will get their share of future exits), so the tokens can retain their intrinsic value even if Bitcoin goes down. Multiple such tokens are deploying in Q1 for funds, companies and assets (mainly real estate)....“

As the popularity of cryptocurrencies as an asset class builds, a small but growing array of alternative investing opportunities have become available including other digital coins with different protocols; recently instituted futures trading via CME and CBOE; and soon, two NYSE listed Bitcoin ETFs.

Bitcoin remains a high risk proposition and severe downturns are common. But it's clear that there's a mainstream hunger developing for the asset class, and with it, a burgeoning market for safer ways to participate.

Bitcoin Dilemma: HODL Or GTHO Now
 

Related Articles

Bitcoin Dilemma: HODL Or GTHO Now

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (7)
Mr Browns
Mr Browns Dec 27, 2017 3:44PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hodl comes from a misspelling of the word hold on some forum a few years ago. It doesn't mean hold on for dear life...
Sheryar Tahirkheli
Sheryar Tahirkheli Dec 27, 2017 3:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Haven’t read a piece till date on the subject as this. TZ we need more writings on the subject 1/28000 percent of population knows about crypto yet . I am not a rocket scientist guys but I have given up on stocks . It’s totally driven by shorts you buy a stock it gives a perfect quarterly result and there it plummets. Crypto got a 1000% gain in past 60 days. Why the ****not, it’s the future say hello to it .
Show previous replies (1)
mad god
mad god Dec 27, 2017 3:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what? you relies on quarterly report to buy stock? You should use TA such as momentum, mfi, stoch to determine sell and buy my dear. Believe it or not, I use TA to trade and some of my weekly income from stock is 5 digit.
Vincze Peter
Vincze Peter Dec 27, 2017 3:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I am new in this whole stock market. Could you please explain what TA, mfi and stoch are?
Vincze Peter
Vincze Peter Dec 27, 2017 3:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I am new in this whole stock market. Could you please explain what TA, mfi and stoch are?
Felwtbiz Official
Felwtbiz Official Dec 27, 2017 3:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Broker?
alex schiavi
alex schiavi Dec 27, 2017 3:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ta= technical analysis. Stoch, Mfi, momentum, vmap, etc are components of technical analysis. Best of luck in the future :)
Beast Mode
Beast Mode Dec 27, 2017 2:51PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The chart added to this article has no technical whatsoever. Bitcoin has built up support and resistance level, add some. IMO a bubble is caused by dodgy bankers loaning money to people who are living on a bread line, just before they ramp up interest rates and yank away their jobs.
Can Rizai
Can Rizai Dec 27, 2017 2:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bitcoin is a speculative bubble which is driven by people who hopes to be like Warren Buffet. But their knowledge in economy, currencies, future, risk managment is nowhere near to Buffet's. I am not bragging about myself, i am not as advanced as Buffet or other billionaires but atleast i am not dreaming to be rich with an easy and effortless way and this won't happen if you do not gambe.
tony ooh
tony ooh Dec 27, 2017 2:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
can: you should write columns. no kidding. you go on about nothing and discuss the fractals of dreaming. truly, you are a budding financial columnist in the making.
Evan Reinhard
Evan Reinhard Dec 27, 2017 2:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If you think bitcoin has peaked you aren't paying attention. It hasn't even captured a 1% of the mass market. Future tech will make your old way if investing and spending money close to obsolete
tony ooh
tony ooh Dec 27, 2017 2:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
years ago i would have said you didn't have firm grasp. but now, btc is earning many, many copycats so to speak. btc and, in my opin, litecoin, are here to stay. it's only going to get better. central banks can print all the money they need for fake govt pensions including social sec. that won't make btc fade; only makes it stronger.
Dale Hernlund
Dale Hernlund Dec 27, 2017 1:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ha ha. BTC is just like a 3x ETF
tony ooh
tony ooh Dec 27, 2017 1:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
no clue, obviously dale. much of btc trade is done by the lowly carbon based. 3X moves on the algo rhythms. study up, dale. if you don't like btc swings, then you just don't understand real people much. sorry for that. people are fickle, but real. btc perhaps is the only real mkt for now, anyway. should you want to expand your reach, might you tune in to max and stacey keiser now and then.
tony ooh
tony ooh Dec 27, 2017 12:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
amusing: "new and improved gold." know that probably none of these incessant column digit wasters own any crypto. you can always tell when a columnist is wasting your time when they post graphs that go on one after another and quote bizarre articles.
Oliver Rios
orios01 Dec 27, 2017 12:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
not to mention crypto has no battle scars. it was made post 2008 we dont know how it would act during a collapse. to assume it would be able to withstand a shock/pretend it wouldnt be affected by a shock like that is a delusion of grandeur
Matthew Paull
Matthew Paull Dec 27, 2017 12:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Agreed! I only continued to read on just to see where this columnist would go next. Lol. They even called Bitcoin an alt-currency, which it isn’t. Bitcoin is the OG and all others that cane after it are so called “alt-currencies”
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email