It seems the crypto community was onto something when they minted the term HODL in the vast reaches of internet forums.
HODL, which is internet slang in the cryptocurrency community for holding cryptocurrency rather than selling it, emerged as a term in the early 2010s, when people were still on the fence regarding digital currencies like Bitcoin. Bitcoin was dirt cheap in its early days, and those with the resources and foresight understood the importance of Bitcoin, and soon, would hoard mass amounts of it.
You’d think that given the value surge we witnessed this year, after a terrible 2018, people would be tripping over themselves to unload and make a quick buck. However, that doesn’t seem to be the case. While Bitcoin and its ilk are wrongfully seen as a way to get rich quick, it seems the serious investors are holding on to their coins.
“Over 60% of the total Bitcoin (BTC) in circulation has not left its wallet in more than a year, highlighting demand among investors,” the Coin Telegraph (CT) reported. “That was the conclusion of analyst Rhythm, who uploaded statistics about Bitcoin network activity on Dec. 2.”
“Of the roughly 18.08 million Bitcoins which have been mined, 11.58 million — or 64% of the supply — has stayed in the same wallet since 2018,” CT noted.
Given that Bitcoin is of limited supply, set to be fully harvest in a hundred years or so, coupled with decreasing mining rewards and increasing demand, Hodlers are opting to play the waiting game. The earliest adopters of Bitcoin became millionaires after they sold off their initial supply. On the other hand, these new Hodlers seem to be aiming to become billionaires instead, likely willing to sit on their coins for years to ensure they cash them out at peak profitability.
Then again, Bitcoin and other cryptocurrencies have long been known to be very volatile and unstable. Just look at Bitcoin’s value today, having dropped from the highs of early 2019 by thousands of dollars. Today, it’s trading for $7,290. Some reports state that it could drop to $5,000 soon. Sure, Hodlers are playing the waiting game, but how long will they have to wait, and will the value of Bitcoin really reward them as much as they’re hoping?
That’s a risk they’ll have to take, I’m afraid.