HODL: why holding is more profitable than trading

With the development of the crypto industry, specialized terms have emerged, used by experienced digital asset users. One of such terms is "HODL", which has become almost the basis of crypto investments and the most recognizable slogan of the Web3 industry.

What is HODL?

HODL comes from the English word "hold" and became an internet meme after a typo by a member of the crypto community on Bitcointalk, a famous forum dedicated to digital assets.

On December 13, 2013, a particular user, in response to a sharp drop in Bitcoin price, left a message on the forum with the title "I AM HODLING". The essence of the message was that the author would not sell Bitcoin despite the fall and intended to "hold the asset at any cost".

The term HODL quickly spread among crypto enthusiasts and even acquired a phrase-decoding "Hold On for Dear Life".

More than 10 years later, HODL is not just a term, but a philosophical movement among crypto investors who are confident in the long-term growth of cryptocurrencies and who reflect "resilience in the face of volatility" of digital assets. The magazine TheStreet even called HODL "the favorite mantra" of Bitcoin holders. And the holders themselves are often called "Hodlers".

What does HODL mean in investments?

With the spread of the term, HODL turned into an investment strategy, the essence of which is "to hold cryptocurrency as long as possible", not paying attention to market volatility and timeframes*.

* Timeframes in trading — time intervals in which the price dynamics of a particular asset are displayed.

Most often, the term HODL is used to refer to Bitcoin as the most stable digital asset on the market, because in the event of a correction, other cryptocurrencies (altcoins) fall in price much more sharply. For example, after reaching all-time highs (ATH) in November 2021, the cost of Bitcoin (BTC) decreased by about 4 times, while the price of the largest altcoin by market cap, Ethereum (ETH), decreased by almost 5 times.

The philosophy of HODL is to hold the asset for years, ignoring information noise and short-term fluctuations of the crypto market. Now HODL is the dominant investment model in the market. Well-known players in the crypto market, such as Tesla and Strategy (formerly MicroStrategy), follow HODL strategies and are among the largest public companies holding Bitcoin.

How effective is HODL?

There is a common belief that trading yields more profit than HODL, but this is a delusion. Short-term trading is a complex discipline that requires professional preparation; many beginners often take losses.

According to Berkeley University, 80% of traders lose money in the first year of trading. Another study by Barber shows that the share of losing traders ranges from 90% to 98%.

Statistics are instead on the side of HODL investors. According to analytical data, about 70% of the total Bitcoin supply is concentrated in the hands of so-called Long-Term Holders — that is, long-term investors whose assets remained unmoved for at least 155 days. At the same time, according to IntoTheBlock research, about 55–60% of retail crypto investors adhere to the HODL strategy even in periods of intense volatility, when the price of assets changes quickly by large values.

Historical data also show that HODL investors with an average holding period of 3 to 5 years achieve better returns than short-term traders.

Moreover, according to 2024 data, the share of long-term holders in profits reached 100%. This happened against the background of the growth of Bitcoin above $71,000.

The statistical data show that trading does not even come close to these values. At the same time, unlike trading, HODL does not require specialized preparation or even investment experience. All that a HODL user needs to do is simply "buy and hold as long as possible".

For example, if a user bought Bitcoin in 2021 at the peak of $69,000, they would still have a profit as of November 2025. At the current price of $109,000, the income of a HODL investor would be about 60%.

The HODL strategy has other advantages. For example, in the US, long-term holders get benefits from lower tax rates. This is another reason why HODL is so popular in this region: the US is one of the leaders in the number of Bitcoin holders, which is more than the number of gold owners.

With the HODL strategy, many investors remain optimistic about the further growth of Bitcoin and key altcoins. For example, Ark Invest founder and one of the strongest supporters of HODL, Cathie Wood, believes that the price of Bitcoin by 2026 may grow to $500,000.

At the same time, HODL is not blind faith, but a statistically confirmed model, where the key result is given by the effect of time in the market, not attempts to beat the market. Historically, it is HODL investors who capture most of the returns; therefore, the term, which began as a meme, has become the foundation of modern crypto investment practice.