Should You HODL Bitcoin?

Fact checked by Michael LoganReviewed by Erika Rasure

The term “HODL” began as a typo for the word “hold.” It appeared on a BitcoinTalk.com forum, and the crypto community found it so amusing that they started using “HODL” as a term to denote holding (rather than selling) one’s cryptocurrency.

Key Takeaways

• “HODL” was originally a typo meant to indicate “hold” cryptocurrency.
• Bitcoin, in particular, has been known for wild fluctuations in price and volatility, making the decision as to whether to HODL it more challenging.
• Bitcoin Spot ETF approvals in January 2024 and following price increases make a strong case for holding.
• Severe drops followed by a horizontal market, such as the crypto winter of 2022 and 2023, make a strong case for selling.

Bitcoin’s Highs and Lows

Bitcoin brought seasonal cheer to investors when its price gathered pace and broke records in December 2017. The heady run-up in its price had Bitcoin enthusiasts making wild forecasts about its price down the line. Their prognoses were much gloomier in March and April 2018. The cryptocurrency’s price was down by more than two-thirds from its December 2017 high and dropped to $3,237 by December 2019. On Nov. 10, 2021, Bitcoin reached an at-the-time high of $69,000 before ending the day at $64,921. Two years later, the cryptocurrency’s end-of-day price was $37,391 after spending some time in the mid $20,000s. In March 2024, it reached another high of $73,794 before dropping into the $60,000s a few days later.

So, Bitcoin is well-known for its wild price fluctuations—volatility that investors have come to expect. But that doesn’t make it any less anxiety-inducing when money is involved. Bitcoin’s price movements sometimes force investors to reconsider their opinions and positions. Here’s a brief recap of the bull and bear cases for Bitcoin.

The Bear Case for Bitcoin 

A steady stream of hacks and scandals from within the cryptocurrency ecosystem has ensured that its reputation as a venue for criminal activities persists. There have been many prominent examples, from Silk Road to the FTX Exchange scandal. Bitcoin investors have appeared to take it all in stride, continuing to trade during massive price spikes and drops.

Note

The introduction of Bitcoin futures and the entry of institutional money into its ecosystem was supposed to cut back on volatility, but a quick look at price swings shows it didn’t help much.

Regulators and economists around the world have added to the pressure by criticizing Bitcoin in public forums. Their stance has made governments wary of bringing it under legal cover. Globally, regulatory agencies have introduced or are developing laws regarding cryptocurrencies and crypto-assets, fueling the bearish stance that cryptocurrency is on its way down.

Bitcoin’s high transaction fees were considered a deterrent to mass adoption, but they fell after the community introduced network upgrades—although they can still be high based on congestion. Technological solutions, such as the Lightning Network and the Taproot upgrade, were supposed to be a remedy for Bitcoin’s scaling problems because they speed up the network. However, bears remained skeptical after the Lightning network failed to garner widespread adoption on many large and popular platforms until 2022.

The crypto winter of 2022 and 2023 further fueled bearish stances that Bitcoin was done. Even after Bitcoin Spot ETFs were approved in January 2024, bears still called for price drops because of the way the crypto’s price always responds to events and news.

The Bull Case for Bitcoin 

The primary bull case for Bitcoin is based on the virtues of patience. Bullish Bitcoin investors point to the cryptocurrency’s previous price action as proof that Bitcoin’s price will rise again.

Large corporations are becoming more involved in the space. Google, Meta (formerly Facebook), and X Corp. (formerly Twitter, Inc.) are among some of the big names that have decided to participate in cryptocurrency. Meta has relaxed its cryptocurrency ad policies, and the rest have all begun accepting cryptocurrency payments.

Actions taken by governments and regulatory agencies also indicate a thawing of positions related to cryptocurrency. Bitcoin Futures ETFs and then Bitcoin Spot ETFs introduced further liquidity into Bitcoin’s ecosystem. Pressure from cryptocurrency investors on regulators may be loosening the regulatory straps.

Bitcoin halvings, where the reward is cut in half every four years or so, also bring bullish sentiments because bulls correlate halvings with price increases.

Who Originated Bitcoin?

The creation of the original Bitcoin cryptocurrency in 2008 is credited to an unknown party or parties who used the alias “Satoshi Nakamoto.” This individual or entity turned the open-source license over to developers in 2010.

What Is Cryptocurrency?

Cryptocurrency is a virtual currency that uses cryptography to channel secure transactions that may be recorded on a distributed ledger. Transactions can be either “on-chain” or “off-chain,” depending on whether they’re recorded on a ledger. Blockchain technology prevents cryptocurrency from being counterfeited.

What Are Some Other Types of Cryptocurrency?

There are thousands of versions of cryptocurrency in addition to Bitcoin, including ether, Dogecoin, and others.

The Bottom Line 

The bulls are of the opinion that Bitcoin’s price follows a predictable pattern based on previous trends and that it will rise again. But the bears point to negative sentiment, regulatory issues, and scandals associated with the original cryptocurrency to make their case for selling Bitcoin.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author owns Litecoin and Bitcoin.

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